Royalties are becoming a new dimension of competition in the NFT trading market. For a long time in the past, the royalty rule defined by OpenSea, the leader in the NFT trading market, is that the seller pays the royalty set by the project party or creator (generally defaults to 10% of the transaction price), in order to avoid the large scale of NFTs. The problem that creators cannot share revenue after circulation and appreciation. There are also LooksRare, Rarible, SuperRare, MagicEden and so on that use similar rules. But now, as the market growth slows down, NFT competition is becoming more intense, and new entrants are taking royalties to “surge”, hoping to stand out. For example, the NFT AMM trading market SudoSwap directly cancels the royalties; X2Y2 has launched a custom royalty function that allows buyers to choose to pay 100%, 50% or 0% of the corresponding royalties.
Should you set royalties? What percentage of royalties should be set reasonably? Who should pay the royalties? These issues have become key issues affecting the next development of the NFT trading market. But before discussing these issues, a general understanding of NFT royalties is required. To this end, PAData, a data news column of PANews, analyzed the royalties of 1,957 NFT projects on the market and found that:
1) The average royalty of 1956 NFT projects is 9.06%. The 25% of projects with the highest royalties all have royalties over 10.50%, and the 25% of projects with the lowest royalties all have royalties below 7.50%.
2) The royalties of nearly 60% of the projects are higher than the average, but the distribution is relatively concentrated. The royalties are not the key to the differentiated competition of these projects, and the royalties of 40% of the projects are lower than the average, but the distribution is relatively scattered, and the royalties may be these projects. The embodiment of differentiated competition.
3) Royalties are statistically related to circulation and floor price, that is, the higher the floor price, the higher the royalty may be, and the larger the circulation, the lower the royalty may be.
4) This year, there is a correlation between royalties and release time, i.e. royalties have grown over time of release. Moreover, after July this year, the fluctuation range of royalties is smaller, concentrated between 8% and 10%, which may mean that projects issued after July have a more consistent consensus on the level of royalties.
5) In the last month, the total monthly royalty income generated by the 10 top projects was approximately US$4,289,500, and the average daily royalty income of each project was approximately US$15,200. The total monthly royalty income generated by the 10 waist projects is approximately $361,700, and the average daily royalty income for the projects is approximately $808. The total monthly royalty income generated by the 10 tail projects is approximately $356,500, and the average daily royalty income per project is approximately $1,224.
6) The average daily royalties for head items are about 18 times and 12 times higher than those for waist and tail items, respectively. The reason why the data performance of the waist project is slightly lower than that of the tail project may be that the number of new projects in the waist project is large, the total transaction days of these new projects are small, and the cumulative total generated is less. This also reflects a phenomenon from the side, that is, the transaction volatility of NFT projects is relatively large, and the transaction volume of new projects in the initial stage is often large, but the persistence is poor, resulting in large fluctuations in rankings.
The average royalties for 1956 projects are 10%, and the royalties for projects issued this year are gradually increasing
PAData has captured the royalty data of 1956 NFT projects on TRAITSNIPER. According to statistics, the average of all project royalties is 9.06%. The top 25% of royalties The royalties of the projects all exceeded 10.50%, reaching a maximum of 12.5%, including the recent popular project DigiDaigaku Genesis, as well as RTFKT-CloneX Mintvial, RTFKT x Nike Dunk Genesis CRYPTOKICKS, adidas Originals Into the Metaverse and other brands project. The lowest 25% of the royalties of the projects are lower than 7.50%, and the lowest is 2.5%, including well-known projects such as Bored Ape Kennel Club and CryptoPunks. In addition, the top blue-chip projects Bored Ape Yacht Club and Mutant Ape Yacht Club have a 5% royalty; Otherdeed for Otherside, Azuki, Pudgy Penguins, Doodles, Cool Cats are all 7.5%.
Judging from the difference between the royalties of different quantiles and the average value, the royalties of 1143 projects are in the high value (above or equal to the average) range. In contrast, 832 projects have royalties in the low value (below average) range, and the gaps in royalties for these projects are more pronounced, ranging from 2.5% to 9%, with the majority of projects receiving royalties of 7.5% or 2.5%. There are reasons to believe that the royalty of nearly 60% of the projects on the market is higher than the average, but the distribution is relatively concentrated, and the royalty is not the key to the differentiated competition of these projects. Royalties may be a manifestation of the differentiating competition of these projects.
The level of royalties has a certain relationship with circulation, floor price and time. From the relationship between royalty and circulation and floor price, in the power function regression model, royalties are statistically correlated with circulation and floor price (p < 0.05), that is, as shown in the figure, the higher the floor price, the higher the floor price. The higher the project, the higher the royalty may be, and the higher the circulation project, the lower the royalty may be. Moreover, the relationship between royalties and circulation also shows correlations in linear, logarithmic and polynomial models. From the breadth of the model’s use range, the relationship between royalties and circulation is stronger than the relationship between royalties and floor prices. correlations are more general. However, these are only phenomena seen from the distribution of known royalties, and how exactly project parties and creators set royalties may still be a personal choice for now.
From the perspective of the relationship between royalties and release time, for this year, there is a correlation between royalties and release time (p < 0.05), that is, as shown in the figure below, royalties increase with release time. At the beginning of the year, the average royalty per project was about 6.5%, but by the beginning of September, it had risen to 9.74%, an overall increase of more than 3 percentage points. Moreover, it is worth noting that after July this year, the fluctuation of royalties has become smaller, basically fluctuating between 8% and 10%, which may mean that the consensus on the level of royalties is more consistent for projects issued after July. . But whether this trend will continue, it still needs to be observed for a longer time.
The average daily royalty income of top projects exceeds US$15,000, and there is a huge gap in the royalty income of different projects
According to the royalty ratio of each project and the daily transaction volume, the daily royalty income of each project can be estimated. In order to have a more comprehensive understanding of the royalty income that projects with different transaction volumes can obtain, PAData ranks TRAITSNIPER according to the transaction volume of the last 7 days. , select the projects ranked 1-10 as the representative of the head project, the project ranked 45-54 as the representative of the waist project, the project ranked 91-100 as the representative of the tail project, and 5 projects were selected separately according to the market volume. Representatives of other popular projects. Among them, the daily transaction volume data of multiple projects in the tail project is missing, so the missing projects are not included in the statistics, and the projects in the subsequent rankings are selected in turn to make up.
According to statistics, the average royalty ratio of 10 head projects is 7.75%, and the distribution range is between 5% and 12.5%. In the most recent month, the total monthly royalty income generated by the top projects was approximately $4,289,500, and the average monthly royalty income per project was $471,700 (median). Among them, Otherdeed for Otherside had the highest monthly royalty income, reaching $928,500, followed by Bored Ape Yacht Club, Mutant Ape Yacht Club, Moonbirds and DigiDaigaku Genesis, which also exceeded $500,000 in monthly royalty income. In terms of average daily income, the average daily royalty income of the 10 top projects is about $15,200 (median). Among them, Otherdeed for Otherside has the highest average daily royalty income, which is about $30,000. Considering that the overall transaction volume of the NFT market has been sluggish recently, if the transaction is active, the project will receive a very considerable royalty income.
The average royalty ratio of the 10 waist projects is 9.39%, and the distribution interval is also between 5% and 12.5%. In the most recent month, the total monthly royalty income generated by the waist project was about $361,700, which was about 8% of the head project, and the average monthly royalty income per project was $25,000 (median), which was about $25,000 per project (median). about 5% of the project. Both of these figures are significantly lower than the top items. Among them, CryptoNinja Partners has the highest monthly royalty income of about US$95,600, followed by Murakami.Flowers Official and BEANZ Official, with monthly royalty income of US$92,900 and US$67,200 respectively. The total monthly royalty income of other waist projects is basically below $20,000, and the lowest Vitalik Pumps is only $908, which is related to its short launch time and low royalties. Looking at the average daily income, the average daily royalty income for the 10 waist projects is about $808 (median), which is about 5% of the head projects. Among them, CryptoNinja Partners has the highest average daily royalty income of about $3,085.
The average royalty ratio for the 10 tail projects is 7.60%, with a distribution range of 2.5%-10%. In the most recent month, the total monthly royalty income generated by the tail project was about $356,500, slightly lower than that of the waist project, but also about 8% of the head project, with an average monthly royalty income of $37,900 per project ( median), about 51% higher than the waist item, but about 7% higher than the head item. One reason that the monthly royalty income of the tail project performed better than the waist project may be that the waist project has a large number of new projects, and the total transaction days of these new projects are less, and the cumulative total generated is less. This also reflects a phenomenon from the side, that is, the transaction volatility of NFT projects is relatively large, and the transaction volume of new projects in the initial stage is often large, but the persistence is poor, resulting in large fluctuations in rankings. In terms of average daily income, the average daily royalty income of the 10 tail projects is about $1,224 (median), which is about 51% higher than the waist project and about 7% of the head project. Among them, 10KTF has the highest average daily royalty income, which is about 1877 US dollars.
Finally, the data performance of the five popular projects is behind the head project, but significantly better than the waist project and the tail project. The average monthly royalty income of each popular project is about 226,300 US dollars, which is about 48% of the head project. In terms of average daily income, the average royalty income of these popular projects is about $7,300, which is also about 48% of the top projects.
In general, there is a huge gap in royalty income between projects with different transaction volumes, and the royalty income of top projects is much higher than that of other categories of projects. On the one hand, it is related to the level of royalties, and on the other hand, it is also related to the relationship between transaction volume and currency price.