NFT Royalties: Yuga Labs (BAYC) Leads the Dance with $140M – Coins.fr

Through the application of royalties on the sale of NFT Ethereumcompanies have generated $1.8 billion of receipts. 482 sets alone represent 80% death income. But this model is increasingly divisive.

What is the business model of collection designers NFT like Yuga Labs with Bored Ape Yacht Club ? The royalties. With each sale, the company receives a percentage on the transaction. This money is usually collected through marketplaces. On Ethereumthe industry benchmark is OpenSea.

It is the marketplace that therefore collects from the seller, in addition to its commission, the royalties intended to finance creators. And according to Galaxy Digital, this business model can be particularly remunerative for some people collection designers and for the brands.

10 entities collect 27% of royalties

The researchers estimate that the amounts paid exceed now the $1.8 billion. Ten entities, including Yuga Labs, Chiru Labs (Azuki) and The Sandboxaccount for 27% of royalties collected to date.

In total, 482 NFT collections represent 80% of all royalties. And the most efficient in this sector, it is therefore Yuga Labsincluding the various collections, such as BAYC or CryptoPunksgenerated $147.6 million.

According to Galaxy Digital, Yuga Labs is undoubtedly the most effective on this business model. The study thus measures that the primary sale of the Bored Ape represented only $2.2 million.

But thanks to a 2.5% royalty rate on each transaction, BAYC raised $54 million for Yuga Labs through secondary operations. This success inspired other creators, note the researchers.

Jump in royalty rates and brand appetite

Other collections have thus implemented royalties, or even increased their rates. With the NFT market booming in 2021, the standard rate of 2.5% increased to 5% on collections such as Azuki, doodlesCloneX and Moonbirds.

Yuga Labs has largely followed suit. At its launch, its Otherdeeds collection started with a rate of 5%. Since its launch, it has thus brought in $44 million to the company.

Meebits, another Yuga Labs collection, which did not apply royalties, went from 0 to 5%. Thanks to this remunerative model, the company is at the forefront of the NFT market. But royalties are also a paying system for traditional brands.

Nike, Gucci, Adidas, Dolce & Gabbanahave pocketed tens of millions of dollars through the collection of royalties. However, debate is mounting against this business model and how to preserve it.

1666620879 367 NFT Royalties Yuga Labs BAYC Leads the Dance with 140M

Zero royalties is progressing

Royalties are not applied at the level of smart contracts, but of marketplaces. And some, especially on Solanaclearly make the choice of zero royalties or make it an optional payment. For big brands, the end of these sales commissions would mean a considerable loss of revenue.

However, royalties are not the only possible revenue model. The CryptoPunks, precursors on the market, are exempt from royalties. Their sale is restricted to a marketplace to ensure compliance with this principle.

their creator, Larva Labs, chose to keep 1000 Punks, which he can sell to fund his accounts. And other models probably still need to be invented in such an emerging sector.

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NFT Royalties: Yuga Labs (BAYC) Leads the Dance with $140M – Coins.fr


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