Royalties allow creators to earn a percentage of the sale price each time an NFT is sold on a marketplace. In Cardano royalties are implemented using metadata only, and does not require a smart contract.We follow CIP27 to define royalties in the collections. If you want to know more about CIP27 follow this link.
We define the following input parameters:
- Royalty address: Wallet address receiving the royalty payments.
- Royalty percentage: Percentage of the sale price earned each time your NFT creation is sold on a marketplace. It can be any floating point value from 0.0 to 1.0, representing between 0 and 100 per cent. For example, 0.05 means 5%.
To have royalties on your collection, you must mint the royalty token before minting the first NFT. You must mint the royalty token and pay the transaction fee (~0.18 ADA). Take into consideration that any future updates or rewrites will be ignored. This prevents the collection's creator from changing the royalties at a future date.
A royalty token will live forever in the blockchain; therefore, you can't change the percentage or the wallet receiving the payments. Make sure you can access that wallet and save the seed phrase property.
In this example we are going to create a 5% royalty for the collection.
Collection with 5% royalty
When the collection with royalty is created it will show you the following information, stating that you must mint the royalty token first. You can click on the link or the button that says Mint royalty token.
To have royalties on your collection, you must mint the royalty token before minting the first NFT.
Once you click on the button it will open the payment gateway and you just have to pay the transaction fee which is approximately 0.18 Ada.
Pay the fees for the royalty token
Once the token is minted you'll see the confirmation.
Royalty token successfully purcased.
If you click on view item you'll see the transaction in Cardanoscan and the metadata minted on the blockchain.