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What are NFT Royalties? Here's What You Need to Know
Non-fungible token (NFT) royalties are an important part of the blockchain ecosystem. Many people don’t know what NFTs are or how they work, but that doesn’t change the fact that these tokens are a major force in the industry. In this article, we’ll look at NFTs, non-fungible token royalty systems, and why you should care about them.
How do NFT royalties work?
NFTs are digital assets that are unique and owned by individuals. The tokens can be used as trading cards, digital art, digital collectibles, and more. NFTs can be traded and exchanged on the blockchain, and they can have unique attributes attached to them. These attributes typically relate to ownership. For example, an artist can create a digital painting and then use a royalty to tie the ownership of the painting to a blockchain token. If someone then buys the digital painting, they also gain the right to own the token. This is how NFT royalties work because the token acts as proof of ownership for that specific painting. You can think of it as owning a share of the painting.
Why are NFT royalties important?
NFT royalties are important because they add value to blockchain ecosystems. Artists and creators can use them to tie their work to blockchain tokens. These tokens can then be traded and used in the marketplace. Not only does this add value to the blockchain ecosystem, but it also helps artists and creators get paid for their work. People can buy tokens that represent their ownership in works of art. This means that artists can get paid when their work is sold. It also means that people get to enjoy art and other digital goods while also receiving tokenized proof of ownership.
How will NFT royalty systems operate in the future?
Because NFTs are digital assets, they can be programmed with certain functions. This means that they can have unique attributes and functions that the owner can use and control. For example, artists can program their digital art tokens to self-destruct once they are sold. This would prevent the token from being sold more than once. Other royalty systems could be programmed to allow for partial ownership. This would be great for allowing investors to participate in an artist’s work without having full ownership of the art itself. There are many ways that NFT royalty systems could operate in the future. They could work to improve the efficiency of the art industry, and they could also be used to protect artists’ rights.
Why You Should Care About NFT Royalties
As we’ve seen, NFT royalties are an important part of the blockchain ecosystem. They can help artists and creators get paid for their work, and they can also be used to protect their rights. If you like art and want to support artists, then you should care about NFT royalties. It’s not just artists that can benefit from these types of tokens, though. Collectors can also enjoy owning unique tokens that represent their ownership to pieces of digital art. That’s why everyone should care about NFT royalties. If you like art at all, then you’ll like these tokens.
Final Words: What is the future of NFT Royalties?
The future of NFT royalties is looking bright. This is because the tokens can be used for more than just art. Artists can create digital goods like paintings, music, books, and other creative works and tie them to blockchain tokens. This will allow them to get paid for their work and to protect their rights. NFTs can also be used for more than just ownership. They can also be used for voting and for governance. These are just a few examples of what NFTs can do in the future. There are many other uses for these tokens, and we can’t wait to see what happens next.
Top Tier Athletes And Their Involvement In NFT World
Many parents support the idea of their offspring becoming athletes and sports stars. When asking a child about their career aspirations, becoming a sports star would top the list. Though reaching the pinnacle is difficult, it is one of the best careers in the world. The attraction to sports is the players' financial gain and adulation. Anyone who reaches the top of any sport will become financially free. Furthermore, players from the most popular sports are celebrities on par with actors and famous businesspeople.
The vast sums involved in sports are due to the massive interest and demand from the general public. People love sports and are willing to pay enormous money to watch sporting events. Due to the fascination, businesses not involved with sports pay massive advertising fees to become associated with the sport. There are many sports, from golf, martial arts, cycling, and racket sports to track and field events. It is an endless list.
However, some sports have better earning potential than others. Sports such as soccer, football, basketball, golf, and tennis are some lucrative sporting activities. Anyone who reaches the pinnacle in these activities will easily earn millions of dollars. There are few sports stars whose fortunes run into billions. Earnings are not limited to the salary received from the clubs. Top sports stars can accumulate wealth through endorsements, sponsorship deals, and payments from their clubs. The massive earnings are due to the player's skill set combined with their popularity. A famous, well-loved star will command the highest salaries.
Investment Options For Sport Stars
Like all wealthy people, sports stars invest their income; they use their finance to buy more wealth. It makes zero sense for money to sit idle in bank accounts. Investments take all kinds of forms. From starting their own business, investing in other companies to involvement in financial markets are some of the popular forms of investments. Cryptocurrencies and their associated technologies have become mainstream in the last few years. The portfolio of many wealthy people, including sports stars, usually has some investment in this arena.
Investing In NFTs
Non Fungible Tokens (NFTs) are one way to invest in cryptocurrency technologies. This field has attracted many sports stars. Some famous sports stars who hold NFTs include Stephen Curry, Serena Williams, Shaquille O'Neal, and Neymar Jr. These are just a few of the hundreds of sports stars who have become involved with NFTs.
NFTs, with their cartoon art representation, appear fun and appeal to the younger generation. Given that the sports star demographic is of the lower age bracket, it makes perfect sense for these people to invest in NFTs. Owning NFTs can help market sports stars and their brands. Becoming associated with a popular NFT collection will increase the media coverage received. For example, if an athlete buys a blue-chip NFT such as the Board Ape Yacht Club, the news will be seen on all major outlets and social media channels. This is a win-win situation for both the project and the athlete.
The more an athlete is featured in the popular media, the more it enhances their prominence. It allows them to demand more outstanding salaries and endorsements. The involvement of top-tier athletes will help drive up the price of the NFT, a good situation for the NFT project. Additionally, NFTs are an investment opportunity. Though buying NFTs is highly speculative, there is an excellent chance that blue-chip projects will see a price rise. Top-tier NFT projects such as BAYC and Azuki continue to see a price increase.
NFTs can help well-known athletes connect with their fans. The trend is for athletes to buy NFTs from significant projects to date. There will be a more significant number of athletes who will release their own NFT collections. It offers the athlete a way to bond with fans in new and innovative ways.
Holders gain the opportunity to meet the star or receive merchandise. This helps to solidify the relationship; it will lead the fans to become even more interested in the athlete's brand and helps to foster a community of fans in ways never seen before. There is also a financial benefit for the fans. Owning the NFTs of a sports star, the fan can sell these assets. Previously the relationship has been a one-way street; the athlete benefited from fans without much reciprocity.
If the perceived value of the star is on the rise, the price of the NFT will increase. It offers the opportunity for the holder to sell their NFTs for a profit. NFTs open up all manner of possibilities in the world of sports. Sporting clubs can sell NFTs, which will offer their fans the opportunity to gain merchandise, special ticket allocation, or vote on club governance. NFTs are relatively novel, but there is no doubt that this is a field that opens up opportunities never seen before in the world of sports.
The Importance Of The Founder In NFT Projects
People who've followed NFTs for some time are aware of these essential considerations when buying NFTs. Many new members of the NFT community overlook this critical aspect.
Many newbies buy NFTs without much consideration. The usual pattern is for people to hear about NFTs, find the NFT community on Social Media platforms such as Twitter, and become part of the Discord servers of various projects.
A busy server and quality artwork ensure the newbie becomes involved in the community. It leads to the person minting the NFT on launch.
Following the mint, it's common to see the price of the NFT fall in value. After a few months, the founders neglect the project, and the holders find themselves with an NFT with little value.
Since this neglect has been the standard pattern seen throughout 2021, most NFTs on the secondary market are worth less than the price paid on launch.
There have been numerous cash grabs. The founders make six figures from the NFT project, but the investors have a losing asset.
The success stories in the NFT space have received praise. For example, the Bored Ape Yacht Club (BAYC) is admired throughout the NFT community, and any NFT stories in the mainstream media feature the BAYC regularly.
For every successful project, there are far more failures.
Mistakes Made By More Experienced NFT Buyers.
After spending time in the NFT community, people become aware of the requirements of a good project. They commonly look for the following characteristics:
Doxxed Team. The team mustn't be anonymous. Anonymous groups are more prone to carry out rug pulls (where the founders close the project after launch). Investors have no idea of the identity of the founders. As a result, the groups can quickly abandon the project and scam the investors.
Great Community. There must be a sizable community behind the NFT project. People look at Social Media and Discord profiles to gauge the size of the community. Without a community, there is no one to buy the NFTs.
Good Artwork. Essential to ensure the artwork is high quality and in line with the current trends. For example, there is a great deal of admiration for the artwork by Doodles and Invisible Friends NFT projects.
Utilities. Projects need more than artwork to become a success. The only exception is if the NFTs are from an established artist such as Beeple, Banksy, or another artist with a big following in the traditional art world.
Projects without a well-established artist need to provide utilities in the form of Play To Earn games, events, staking possibilities, and more.
People seeking these factors in projects are better positioned than newbies. But many projects satisfying these conditions still fail to succeed, especially in this current climate where the NFT space is experiencing a bear market.
The Importance Of The Founder
The most critical factor in a project is the founder. Many investors entertain projects because the founder is well known. They could be a celebrity or an industry leader.
Unfortunately, many of these projects flounder in the long term. Shortly after mint, there is a pump in price. But a few months after the launch, the value has become less than the mint price.
The founders are not highly active in the project; they make no effort to immerse themselves in the community.
It leads people to conclude (probably correctly) the founders are not interested in the project. The community loses faith, sells their NFTs, and projects end up in the backwaters of the secondary market.
A successful project is one where the founder engages with the community. They should be active before and after the launch. Making themselves involved in the conversations on Discord and Ask Me Anything (AMA) or Twitter Space shows a genuine interest in the project.
An example of a successful project is VeeFriends by Gary Vee. The founder is always available. He is constantly talking about his projects on Social Media and does not go missing in action.
The most important consideration for any NFT collection is the founder, motives, and project vision.
Unfortunately, the NFT world has seen many cash grabs. The devs and the founders fail to take much interest following the launch.
The reality is that unless the NFT collection is by a genuine, highly established artist, the project starts after the launch.
The easy part is the stage up to the launch; it's the segment where the founders are raising capital to realize a vision. Making their promises become a reality involves hard work.
To date, in the NFT space, many founders are fond of the idea of raising capital. But dislike the effort to complete the project and make the utilities and the roadmap a reality.
Many experienced investors in the NFT community understand the situation and no longer mint NFTs easily. This is a contrasting situation to 2021, where people readily bought NFTs.
Perhaps this explains the current bear trend in the NFT world; sales volumes are significantly lower than the record-breaking numbers a few months ago.
For the investor, the best approach is to take a great deal of interest in the founder. Presenting evidence of interest by the founder ensures confidence in the community.
The involvement of a famous name does not guarantee long-term success.
Common NFT Scams: Identified
Scams exist in many areas of life, defined as fraudulently obtaining money or goods from unsuspecting victims.
The Internet is hugely beneficial for society and helps improve many people's lives. But it has led to criminals using it to defraud people—from phishing and fake shopping websites to dating scams.
Cryptocurrencies use the Internet and are not exempt from scams. The anonymous nature of cryptocurrencies has made things easier for fraudsters.
NFTs are an extension of cryptocurrencies and are an arena with frauds targeting newbies and the uninformed. Since this is a relatively new technology, most people have likely been victims of one form of scam or another.
What are some of the common NFT scams?
After a project launch, the founders exit the project with investors' funds. The founders close the assets associated with the project, such as the Discord server and Twitter account, and leave the scene. With the founders no longer involved and little trace of the project, the price of the NFTs decreases until it becomes worthless. The investors possess nothing more than NFT JPG images on the blockchain.
The NFT space has been rife with these scams throughout 2021. As people become aware, these deceptions are becoming less common.
Anonymous founders carry out rug pulls; people have no idea of the real identity. Given the anonymity and lack of traceability with crypto wallets, it's a straightforward scam to perpetuate.
This is rife in the NFT space. The founders of the project promise various developments for the project.
After the launch, they fail to implement these promises. Over time, the value of the NFTs decreases, and the investors are left holding the bag.
Nearly every NFT investor has been a victim of such activities. Such schemes are also known as a slow rug; the founders leave the project slowly.
These schemes are difficult to classify as a fraud; the founders are in a position to kick their promises into the long grass. And many often come up with all manner of excuses why developments fail to progress.
Pump And Dump
This is where an individual or a group of people team up to buy large quantities of the cheapest NFTs in the collection (buying the floor price).
They drive up the collection price, also known as "sweeping the floor" or "wash trading." After a significant price increase, the NFTs are sold for a profit, and the culprits exit the market. The value of the NFTs decreases, people are left with NFTs worth less than the price paid.
The project founders are known to engage in such practices to drive up the price of their collection.
Fraudsters try to mimic real projects by creating websites and social media profiles with a similar appearance to the actual project.
They aim to lure unsuspecting victims to a website and mint fake NFTs. The victim connects their wallet to mint an NFT, which turns out to be an empty file.
Victims are targeted through direct messages or posting links in the comment section of Social Media platforms.
The problem has become rampant: fraudsters routinely hijack the real Discord server of a project, disabling the power of admins and moderators and placing links to direct members to a fake minting website.
Customer Support Scams
This is a problem commonly seen on Discord and Telegram. Scammers contact through direct messages offering to help people mint NFTs or provide bonus airdrops.
As a customer service representative, the scammer tries to obtain wallet details such as passwords and the seed phrase. Using the information, fraudsters drain the funds from the wallet.
The problem is that NFT projects warn members not to engage in direct message conversations. Official members of staff have ceased contact with members directly through direct messages.
Experienced people will not fall victim to such scams; newbies are the intended targets.
Intellectual Property Theft And Fake Collections
There are projects known to take the artwork from talented artists and use it for their collection. Without agreements in place, this is a form of theft.
Projects using artwork from an artist without permission are a theme in the NFT community.
On discovery, the reputation falls, and the value of the NFTs decline in price; it becomes a loss-making investment.
Some individuals take artwork from upcoming projects, load it to marketplaces such as Open Sea and aim to impersonate the actual project.
Buyers of these NFTs become victims of a scam.
Scams are common because the NFT market is new, with many new people entering the space. It allows fraudsters to exploit inexperience and vulnerabilities.
The best approach for a newbie is spending time in the NFT community, networking with others on platforms such as Discord, and becoming fully aware of the technology before major investment sprees.