NFT
AUSTIN, Texas — Erick Calderon, the co-founder of Art Blocks, sought to dampen the battle over non-fungible token (NFT) maker royalties at CoinDesk’s Consensus Festival. However, he made his own point on the matter clear: according to Calderon, royalties “allow the creator to keep creating.”
Art Blocks is an NFT collection and organization focused on generative art – works of art generated autonomously according to rules set by the creator. (In the context of NFTs, the term usually refers to art generated by computer programs created to live on blockchains.) Recently, Art Blocks debuted an NFT marketplace that bakes creator royalties as a standard feature.
Royalties—money paid out to an NFT’s creator each time an NFT is sold—has long been a point of contention among makers and collectors. Some artists see built-in royalties as an important added value – if not the main added value – of NFTs, and they have been appalled when NFT marketplaces and collectors have taken steps that are eroding the practice of awarding royalties as the norm.
Read the full coverage of Consensus 2023 here.
In his speech at Consensus, Calderon made the case for maker royalties, while noting that the fundamental added value of NFTs – aside from royalties – remains the same.
“Whatever the stock market cycles, whatever happens [failed crypto exchange] FTX does and no matter what happens to our regulation in our government, the value proposition of being able to prove ownership of a digital asset cannot and will not change,” Calderon said.
Referring to popular concepts such as global marketplaces and creator royalties unlocked by NFTs, Calderon said that “all of these add value on top of the premise of being able to prove ownership of a digital asset.”
On royalties, however, Caderon said they are valuable to creators as well as to the broader NFT ecosystem — including the collectors and investors who typically avoid buying assets that require artists to get a share every time they are sold.
There are obvious reasons why an artist would prefer to sell NFTs that pay out royalties.
“The concept of not being able to slog through constantly putting out artwork to make a living – but being able to be more attentive to your releases and create something that can generate extra revenue forever,” says Calderon. .
As for NFT buyers looking to avoid royalties that could cut into their profits, “there are opportunities here that could be missed if we just look at royalties as a transfer tax,” Calderon said.
Calderon’s defense of creative royalties—and the incentives they encourage on the part of artists—wouldn’t be out of place in an Ayn Rand novel. According to Calderon, NFTs encourage artists to think more deeply about their artwork and continuously participate in the NFT community. With the prospect of a bigger, long-lasting payday, Calderon thinks artists will create better, more valuable works of art – with the benefits (and profits) trickling down to speculators.
Aside from royalties, Calderon argued, the Web3 art marketplace will always be fundamentally more artist-friendly.
“A lot of things in the traditional art world happened behind closed doors,” he said. “Here everything happens in the open air. We all build in the open air. We all innovate in public. We all act in public. We know exactly who pays royalties and who doesn’t.”
Anti-royalty marketplaces and NFT collectors still have a place in this ecosystem, he continued. When the debate around NFT royalties boiled over earlier this year, “it was a lot of people shaming people for working in a way that this ecosystem perfectly allows them to work.”
Calderon admitted that his free-market logic in defense of maker royalties also applies to those who try to dismantle them: “It’s like gun laws. You have these rights and people get very aggressive about their ability to maintain that right. If you talk to a decentralized ecosystem, you actually have every right to participate in it however you want.”
