No parent anxious about their child’s economic future has ever forced them to study art.
That’s because, for who knows how long, artists have gotten the short end of the economic stick. In part, this is due to the difficulty involved in tracking secondary sales of artwork—whereas collectors can amass fortunes from buying low and selling high, most artists receive no cut of these sales. Even in industries like music, where royalties are tracked and paid down, much of those payments go to music labels.
Non-fungible tokens (NFTs) were designed to fix that. If adequately implemented, NFTs allow artists to set royalty rates from the outset and automatically collect future sales. No longer will royalties be managed, enforced, and mostly swallowed by middlemen like patrons, publishers, record labels, and others.
Here’s how they work.
What Are NFT Royalties; What’s Their Purpose?
In the art world, royalties are the process by which creators collect payments on a slice of all future sales (With the entirety of the first sale going directly into artists’ pockets).
Of course, royalties work differently in the cryptographic asset world.
NFT artists set a royalty rate once they mint their NFTs for selling; five to ten percent are average rates.
For instance, say you’re a digital cartoonist. You mint and sell a risqué NFT gif of your totally original gigantic lizard character, Zillalord, holding hands under a rainbow with their romantic partner, under a headline that reads, in 3-D font, “Live, Laugh, Love.”
Say you opt for a 10 percent royalty and put the asset up for sale. Two weeks later, it sold for 1 ETH, which, at the time of publishing, is worth around $2,100. You keep the total minus any transaction fees or commission.
Your life moves on. Days, weeks, months; a full year passes from your original sale, and to your great surprise, you’ve spawned a pop culture lifestyle craze that the kids call “Zilla-core.”
Your artwork’s initial buyer has held onto the asset for all that time, and now that they can make serious money from a sale, they’re itching to do so.
They sell it for 8 ETH for it—which translates to a whopping $16,645. Instead of receiving nothing, you get ten percent, $1,664.50. And if sold again, you get ten percent of that, and if sold once more, well, you get the picture.
Rinse, lather, repeat.
It’s important to separate your business and personal expenses
The Problem with NFT Royalty Enforcement
Right now you’re probably thinking, “If this NFT stuff is all that it’s cracked up to be, wouldn’t it have already revolutionized the arts industry?”
Smart question. The above example isn’t every artist’s story.
You see, there’s one little infrastructural quirk of NFTs that has a profound impact on the viability of royalty enforcement. The “smart contracts” that power the agreement between buyer and seller aren’t automatically enforced in many cases. The enforcement mechanism is primarily up to the platform creator and the latest buyer.
This lack of standardization has led to wildly differing enforcement mechanisms across platforms (Many don’t offer royalties at all). Often, once NFTs reach a secondary sales market, artists have no means of enforcing royalty payments whatsoever.
So when, for instance, the electronic musician Jacques Greene sold an entrancing audio loop of his hit “Another Girl,” it’s likely he’ll only keep the proceeds from his initial sale.
At 13 ETH—approximately $28,000—he’ll make out just fine. But not-as-prominent artists will invariably sell their work for considerably less. There, the presence of recurring royalty revenue could have a profoundly positive impact on their ability to continue and grow as an artist.
How banq’s NFT Wallet Secures Royalties
Our mobile NFT wallet was designed to combat this fatal flaw and many other technical shortcomings of the medium.
banq works both as a wallet and an NFT exchange. It administers the smart contract for you and it’s a neutral arbiter of royalty payments for assets purchased on the platform. Once a sale is made, royalty funds are automatically taken out of the transaction and released to the creator’s Royalty Account.
Each time the same NFT is purchased on banq—and no matter how many times it’s re-sold—participating artists will receive their cut. Other participants in the transaction, like creators, reps, and accountants, are granted read-only access to your royalty account, ensuring transparency and encouraging trust.
Additional features include the following.
Minimal Gas Fees
Unlike other marketplaces, banq users can admire, share, and gift their NFTs freely to any user in the network.
Purchase NFTs on Any Marketplace
Unlike the walled gardens of many marketplaces, our checkout with banq feature lets users purchase NFTs from any platform.
Securely Store NFTs in banq’s Content Vault
NFT assets get stored on bank’s content vault. This not only ensures token and network integrity, it effectively fulfills the promise of NFTs: ensuring the smooth transition of ownership for actual, original digital artwork—not merely representation of artwork.
(Optional) Social Network
Creators can freely promote their work to gain prominence and influence within the network. They’ll also receive fanbase analytics that will inform you of how other banq users are interacting with your artwork, and what they wind up doing with it. There’s no penalty for users who wish to remain private.
You don’t need crypto to buy NFTs. Pay with a debit card, credit card, bank account, wire, bitcoin, or Ethereum. What’s more, banq allows you to send your funds in compatible currencies, like USD, Bitcoin, and Ethereum.
Extensive Artist & Asset Verification
To prevent the sort of extensive fraud occurring on other platforms, we verify each artist and artwork on our platform. This way, you know you’re getting the real deal from the actual artist,not a phony from a Russian career hacker working in a semi-official capacity for the Kremlin.
Minimizing Gas Fees
Banq lets its users While banq does not cover gas fees for initial purchases of NFTs, it allows users to share NFTs within the network, with no fees.
How Artists, Investors, & Collectors Benefit from banq
Banq is designed to be easy enough to use for everyone, combined with a feature set that unlocks the true potential of both NFTs and cryptocurrency. Add on top of that the platform’s social features and financial organization focus, and you have a radically new kind of digital wallet.
Independent Artists & Creators
Enjoy an exchange that makes it easy to mint NFTs on your terms, and receive automated enforcement, ensuring that all secondary sales on banq result in royalty payments to dedicated accounts.
banq’s social network provides an active community to gain followers and appreciate the value of offered assets. And our organizational features allow users to track their revenue, expenses, calculate profit, and set aside money for taxes.
Investors benefit from a system designed to facilitate safe, authentic transactions in both NFTs and cryptocurrency. Flexible payment options let users fund their purchases from variousmethods; use credit cards, debit cards, your checking account, Bitcoin, or Ethereum.
All NFTs are stored on our secure wallets, complete with anti-counterfeiting measures to ensure authenticity.
Also, Organizational features let users track their crypto investments and assess fiscal health; users may also grant access to collaborators and employees for management or read-only access.
All unlocked NFT content is safely stored (Or mirrored) in a banq-provided content vault. banq’s optional social engagement features give collectors a free and addicting way to view, share, and gift NFTs without network charges.
The Start of Something Beautiful
Let’s begin the NFT revolution in earnest — download the best NFT app out there today. Our NFT functionality update drops mid-July, and we’ll be adding to it every month after.