Minimum Royalty Standard (EIP-2981)

The Minimum Royalty Standard (EIP-2981) is an Ethereum Improvement Proposal that defines a smart contract interface for non-fungible tokens (NFTs) to specify a royalty amount to be paid to the original creator or rights holder every time the NFT is sold on a secondary market. This standard provides a universal, on-chain mechanism for royalty enforcement, allowing any marketplace or platform to query the NFT's smart contract to determine the correct recipient and payment amount. By implementing a single, agreed-upon function—royaltyInfo(uint256 tokenId, uint256 salePrice)—it solves the previous fragmentation where each marketplace used its own proprietary system, often leading to royalty non-payment.

The core technical specification is elegantly simple. The royaltyInfo function takes the NFT's tokenId and the salePrice as inputs and returns two outputs: the receiver address (who gets the royalty) and the royaltyAmount (the specific fee to be paid). This amount is typically calculated as a percentage of the sale price, though the standard allows for any arbitrary logic. This design ensures composability and interoperability, as decentralized applications (dApps), aggregators, and marketplaces can all rely on this single function call to programmatically honor creator fees without requiring off-chain metadata or manual configuration.

EIP-2981 is considered a "minimum" or "baseline" standard because it defines the lowest common denominator for royalty information. It does not enforce payment—that responsibility remains with the marketplace executing the sale—but it provides the necessary data for enforcement. More complex royalty structures, such as split payments to multiple parties or time-based rules, can be built on top of this foundation. Its widespread adoption by major NFT collections and marketplaces has made it the de facto technical solution for on-chain royalty enforcement in the Ethereum ecosystem, promoting a more sustainable economic model for digital creators.

EIP-2981 defines a single, mandatory function, royaltyInfo(), that any marketplace or smart contract can call. This function takes a token's sale price as input and returns two outputs: the royalty recipient's address and the royalty amount to be paid. This mechanism provides a universal, on-chain source of truth for royalty data, replacing the need for off-chain registries or manual configuration by marketplaces. The standard is designed to be gas-efficient and backwards-compatible, allowing existing NFT collections to adopt it via a simple contract upgrade.

The core logic resides in the royaltyInfo(uint256 _tokenId, uint256 _salePrice) function. Implementations can calculate royalties as a fixed amount, a percentage of the sale price, or using custom logic (e.g., tiered rates). A common pattern is to store a basis points value (e.g., 500 for 5%) and a payout address. The function multiplies the _salePrice by the basis points, divides by 10,000, and returns the resulting amount. This design ensures that royalty calculations are transparent, verifiable, and executed deterministically on-chain with every sale.

For the system to function, both the NFT contract and the marketplace must support EIP-2981. The NFT contract implements the standard to declare royalties. A compliant marketplace, such as OpenSea or LooksRare, must query the royaltyInfo() function during a sale and automatically route the calculated royalty payment to the designated recipient before finalizing the transaction. This creates a trust-minimized and enforceable royalty system where payment is a precondition of the trade, not an optional courtesy.

A key feature of EIP-2981 is its support for modular royalty logic. Beyond simple percentages, contracts can implement complex rules: royalties that change over time, split payments between multiple recipients, or dynamic rates based on the token ID or sale price. This flexibility allows for sophisticated creator economies. However, the standard is permissionless; it does not force marketplaces to respect the returned values, leading to the concept of 'royalty-enforcing' versus 'royalty-optional' marketplaces in the ecosystem.

The adoption of EIP-2981 represents a significant shift from off-chain royalty specifications. Prior methods relied on marketplace-specific registries (like OpenSea's) which were centralized and not universally honored. By embedding royalty logic directly into the NFT's smart contract, EIP-2981 empowers creators with sovereign control over their revenue streams. Its success has made it the foundational technical primitive for on-chain creator monetization, influencing subsequent standards like EIP-5496 for multi-privilege management and shaping the development of fully enforceable royalty mechanisms.

EIP-2981 is a standardized smart contract interface that allows an NFT's royalty payment information—specifying a recipient address and a royalty fee—to be read directly from the token's contract. This provides a universal, on-chain mechanism for marketplaces and other platforms to programmatically discover and honor creator royalties during secondary sales, addressing the fragmentation and optionality that plagued earlier royalty models. The proposal defines a single, mandatory function, royaltyInfo(uint256 _tokenId, uint256 _salePrice), which returns the recipient and the royalty amount for a given token and sale price.

The technical implementation is elegantly simple for both creators and integrators. For creators, implementing EIP-2981 involves adding the royaltyInfo function to their NFT smart contract (e.g., an ERC-721 or ERC-1155), where the logic can define fixed fees, tiered rates, or even dynamic calculations. For marketplaces and other intermediaries, integration is a straightforward read call to the NFT contract; they query this function with the token ID and the sale price, receiving the exact amount to send to the royalty recipient, which is then typically deducted from the seller's proceeds before settlement.

A key design principle of EIP-2981 is its per-token-id granularity, allowing royalty schemes to vary between individual tokens within the same collection. This enables use cases like special editions with higher royalty rates or collaborative works where royalties are split between multiple creators. While EIP-2981 sets a vital standard for discovering royalties, it is important to note that it is an informational standard and does not itself enforce payment; enforcement depends on the marketplace or exchange respecting the returned data and executing the transfer.

The proposal's adoption has been widespread, becoming the de facto standard for major NFT marketplaces like OpenSea and Blur, which use it to determine royalty payments. Its success lies in its minimalism and backward compatibility; it doesn't require changes to core token standards and can be added to existing collections via upgradeable contracts or wrapper logic. However, the ecosystem has evolved with supplementary standards like EIP-5496 for managing multiple royalty "splits" and more complex on-chain enforcement mechanisms to address marketplace non-compliance.