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Animoca Brands New NFT Licenses Defend Creator Royalties
In the midst of the NFT market battle and the ubiquitous debate about royalties as an important component of web3, Animoca Brands is taking a stand and introducing three NFT licenses that defend royalties for creators. The set of three licenses “requires the payment of royalties to the creator as a condition of receiving licenses to that NFT’s art and use.” Let’s take a look at how founder Yat Siu and Animoca Brands are approaching (and changing) the conversations around NFT royalties.
Animoca Brands introduces new NFT licenses
NFTs are now a popular way to authenticate digital art, music and other forms of creative content. However, there is one important aspect of NFTs that is often overlooked: royalties. Royalties are payments to the creators of NFTs every time the token is sold or exchanged. This is an essential part of a decentralized and democratic ecosystem that ensures fair distribution of value to creators and contributors, and supports value creation across all NFT commons.
Animoca Brands announced late last year that it would put a framework in place to protect the royalties of creators as much as they can. And in a move to cement this decision, they have recently introduced three NFT licenses to the world. The three licenses are as follows:
- Personal Use Only License: This license permits personal use only.
- Permitted Commercial Use License: This license allows commercial use up to a predetermined annual monetary limit.
- Unlimited Use License: This license allows unlimited personal use and no monetary limit on commercial use.
Additionally, these NFT licenses are available to anyone under a creative commons license.
Royalties for NFT creators are essential for a sustainable and efficient decentralized and democratic ecosystem. They support long-term success, motivate creators, enable ownership and commercial rights, and benefit the public as a whole. Royalties are a social convention that defends the ethos of web3, and not paying them is against the interests of everyone involved.
Yat Sius’ unwavering support for NFT royalties
In mid-2022, Animoca Brands and CEO Yat Siu showed decisive support to enforce royalties to creators. Yat Siu also wrote a lengthy Twitter thread explaining the core meaning of royalties. According to Siu, royalties are a critical part of the web3 ethos and not paying them is “free riding”. This happens when someone benefits from shared services or commons without paying for them.
He further explains that without NFT royalties, creators lack an important incentive to provide long-term sustainable benefits that support the public. The public’s success is to everyone’s benefit. And so NFTs with royalties are better equipped as vehicles for distribution rights and commercial rights. Which is ultimately a win for the whole public.
“No royalties are retrograde. (Traditional) game assets continue to fall in value because game studios can only make money by creating new assets for inflationary game economies. This results in economies without any real value to the players. Why go backwards?” Yat Siu explains further in his tweet thread. Also, he cites @Punk6529, Bored Ape Yacht Club and Sandbox to further clarify his argument. He then explains that not paying royalties harms artistic creation and true ownership. Artists and creators would have no incentive to grant IP rights as part of NFTs, choosing instead to retain copyright to better monetize their creations.
