How Enforcing NFT Royalties On-Chain Protects Creators in Web3

NFT royalties are meant to give creators a fair share every time their digital art, music, or collectible sells again. But in practice, too many marketplaces ignore them. That’s where on-chain enforcement comes in - it’s not just a nice feature, it’s the only way to make sure creators actually get paid.

What On-Chain Royalty Enforcement Really Means

When you mint an NFT, you can set a royalty percentage - say, 10% - that should go to you every time someone resells it. That sounds simple. But until recently, there was no universal rule forcing marketplaces to follow it. Some platforms like OpenSea honored creator royalties. Others, like Blur, let buyers set royalties to zero. That meant artists could earn nothing from secondary sales, even if they built their entire business around NFTs.

On-chain enforcement changes that. It means the royalty payment is coded directly into the NFT’s smart contract. No middleman. No opt-out. When the NFT is sold, the blockchain automatically calculates and sends the royalty to the creator’s wallet. It doesn’t matter if the sale happens on OpenSea, LooksRare, or a brand-new marketplace - if the smart contract says 10% goes to the artist, that’s what happens.

This isn’t magic. It’s built on standards like EIP-2981, introduced in 2020 and widely adopted by 2023. EIP-2981 lets creators define royalty amounts and recipient addresses right inside the NFT’s metadata. It works with both ERC-721 and ERC-1155 tokens. The key? The royalty logic lives on the blockchain, not in a marketplace’s database. That’s what makes it unstoppable.

How EIP-2981 Makes Royalties Work Across Platforms

Before EIP-2981, every marketplace had its own way of handling royalties. Some read metadata. Some ignored it. Some even pretended royalties didn’t exist. That created chaos. An artist’s NFT might earn royalties on OpenSea but zero on Blur. Buyers had no way to know if they were paying the creator or stealing from them.

EIP-2981 fixed that by creating a single, open standard. Any wallet, exchange, or marketplace that supports it can read the royalty information directly from the NFT’s contract. It doesn’t need special permissions. It doesn’t need a whitelist. It just asks: “What’s the royalty amount? Who gets paid?” and the blockchain answers.

For creators, this means you don’t have to sign up with 10 different platforms to get paid. You set your royalty once - on the blockchain - and it travels with your NFT everywhere. That’s interoperability. That’s the whole point of Web3.

But here’s the catch: EIP-2981 only defines how to report royalties. It doesn’t force anyone to pay them. That’s where enforcement mechanisms come in.

Blocklists vs. Allowlists: The Two Ways to Force Compliance

If a marketplace refuses to pay royalties, how do you stop it? There are two main strategies: blocklists and allowlists.

Blocklists work like a firewall. They keep track of known royalty-avoiding marketplaces - like Blur - and block any NFT transfer that tries to go through them. If your NFT is on a blocklist, you can’t sell it on Blur. The transaction fails. Simple. Effective. But here’s the problem: bad actors keep building new marketplaces. Every week, someone deploys a new contract that ignores royalties. Creators have to constantly scan the blockchain, identify new violators, and update their blocklists. It’s a never-ending game of whack-a-mole.

Allowlists are the opposite. Instead of blocking bad actors, you only allow trusted platforms to handle your NFTs. You pick which marketplaces can transfer your NFT. If it’s not on your list, the transfer is denied. This gives you total control. But it also kills flexibility. Buyers can’t trade your NFT on any new platform without your permission. And if you forget to update your allowlist, your NFT becomes locked.

Worse, allowlists don’t stop people from cheating. A buyer could buy your NFT for $0 on an approved marketplace, then pay the seller $10,000 in ETH outside the system. The royalty is paid - technically - but you never see a cent. The system is broken.

Why Cross-Chain Royalties Are Still a Mess

Most NFTs live on Ethereum. But people are moving them to Solana, Polygon, Arbitrum, and even Bitcoin Layer 2s. The problem? Each chain has its own NFT standard. Solana doesn’t use EIP-2981. Polygon might support it, but only if the bridge preserves the metadata.

When an NFT moves from Ethereum to another chain, the royalty data often gets lost. The new chain doesn’t know who the creator is, or what percentage they’re owed. The result? Zero royalties. Even if the original NFT had perfect on-chain enforcement, the moment it crosses chains, it’s vulnerable.

Some projects are trying to fix this. Cross-chain bridges now include royalty translation layers. Others are building native royalty support into their chains. But there’s no universal solution yet. Until every major blockchain agrees on a common royalty standard, creators will keep losing money when their NFTs leave Ethereum.

Platforms That Are Actually Enforcing Royalties

Not all marketplaces are the same. Some are fighting for creators. Others are betting on short-term trading volume.

OpenSea, the biggest NFT platform, now uses on-chain royalty enforcement. It blocks transfers to known royalty-avoiding marketplaces. It also supports EIP-2981 and shows royalty percentages upfront. If you’re a creator, OpenSea is one of the safest places to list your work.

Blur, on the other hand, made headlines by making royalties optional. Buyers can set royalty percentages to zero. In July 2023, Nansen data showed Ethereum-based NFT royalties hit a two-year low - largely because Blur’s model spread fast. Traders loved it. Creators lost millions.

Then there’s Enjin, which launched a blockchain in January 2024 with royalties baked into the protocol itself. Every NFT on Enjin’s chain automatically pays royalties - no exceptions. No blocklists. No allowlists. Just code. It’s the closest thing to a foolproof system we have.

The RARI Foundation also built an EVM-compatible chain with native royalty enforcement. Their goal? Make royalty payments as reliable as gas fees. If you mint on their chain, your royalties are guaranteed - no matter where the NFT ends up.

Why This Matters for Creators

For artists, musicians, and game developers, NFT royalties aren’t a bonus - they’re income. A single NFT sale might earn you $500. But if it sells 10 times, that’s $5,000 in passive income. Without on-chain enforcement, that income disappears.

On-chain royalties also mean you can split payments. Maybe your collaborator gets 5%, your studio gets 3%, and you keep 2%. All of it happens automatically. No invoices. No delays. No disputes.

But it’s not easy. Setting up on-chain royalties requires smart contract knowledge. You need to understand how to embed EIP-2981 data. You need to monitor new marketplaces. You need to decide whether to use blocklists or allowlists. Most creators outsource this to developers or use platforms like Foundation or Zora that handle it for you.

The bottom line? If you’re serious about making money from NFTs, you need to enforce royalties on-chain. Anything else is gambling.

The Future: Embedded Royalties and Global Standards

The industry is moving toward two solutions: embedded blockchain royalty systems and universal standards.

Embedded systems - like Enjin’s chain - are the most reliable. Royalties are part of the protocol, not an add-on. They can’t be turned off. They can’t be bypassed. They just work.

Universal standards are harder. We need Ethereum, Solana, Polygon, and others to agree on one royalty format. That’s a political and technical challenge. But progress is happening. The World Intellectual Property Organization (WIPO) has started exploring NFT rights. Some countries are beginning to recognize smart contracts as legally binding.

For now, the best thing you can do is mint on platforms that support EIP-2981 and avoid marketplaces that let buyers opt out. If you’re building your own NFT collection, embed royalties directly. Don’t rely on marketplaces to do the right thing.

The future of NFTs isn’t just about owning digital art. It’s about sustaining creators. And that only works if the system pays them - automatically, fairly, and without exception.