How Do NFTs Impact Artists' Royalties in the Digital Art Market?

An interesting question and one to keep an eye on as the answer has been evolving, and will continue to evolve, over time.

Here's a bit of education and a couple of views on the topic for those interested:

🚨What Are NFT Royalties?🚨

✅ Through NFTs, artists can tokenize their works and sell them directly to collectors on various online platforms, allowing them to retain a larger share of the sales price and have greater control over their work.

✅ Artists can choose their royalty percentage (dependent on restrictions if you are minting on certain platforms) and are able to make a percentage return on secondary sales of their work.

This seems all rosy, but it doesn't come without disadvantages and controversies. Let's look at a couple:

👉 You may be able to gain a higher percentage of sales than selling in a physical gallery, but for many artists, it could be harder to sell on digital platforms.

👉 As for controversies, OpenSea announced that it would no longer enforce royalty payments after August 31, 2023. Additionally, other marketplaces such as Blur and LooksRare, have also cut royalty rates for artists, leading to a significant impact on creators' income in a race for more users on the platforms.

If you are an artist in the digital or physical space, you need to choose a platform that works for you.

One where you can grow your audience and show your art in the best way possible and the best way for you to earn. 🖼️🎨🧑🎨

Happy Friday, all!

What are your views on the fractionisation of artwork?

For those unaware of what this even is, here's a quick overview:

👉 A digital art-backed NFT or physical art piece backed by NFTs that can be divided into smaller pieces, allowing multiple investors to gain partial ownership of it.

NFT fractionalisation has made it easier for crypto art and physical art enthusiasts and investors to get hold of some of the world’s most expensive pieces or own a share of an expensive and famous physical art piece.

As seems to be the case with any new tech, there are advantages and disadvantages:⬇️⬇️⬇️⬇️

💡Advantages💡

✅ Increased accessibility to those who can't afford high-priced art which could lead to opening up the art industry
✅ Fractionalisation can increase liquidity in the art market.
✅ Investors can diversify their art investments by holding fractional shares in multiple artworks rather than concentrating their investment on a single piece.
✅ Ownership can be determined directly on blockchain bringing needed transparency.

🚨Disadvantages🚨

❌ Legal and regulatory challenges, especially in terms of compliance with securities laws.
❌ Complex Ownership Structure
❌ Could attract solely speculative behaviours rather than buying art because you love it.
❌ Fractionalisation could lead to a perception of dilution of the artwork's cultural or aesthetic value

Most importantly, The big disadvantage for me here is regulations and securities laws. This is still convoluted and muddled, with many projects from the past being pulled up and audited, with some being fined.

Have you, or would you, buy fractionalised artwork? 🤔