NFT Royalty Fees Reach $1 Billion on Opensea in 2022

Opensea released a blog at the start of the new year, providing numbered details on sales and royalties on their platform, including over $1 billion in creator fees being sent back to artists and NFT teams. 

In a market devastated by a lack of true value and with macroeconomics further impacting the world of web3, it is surprising to see so much success being touted by Opensea. 

Although the majority of NFT sales have dropped and led to lower quality collections, it appears that the people making these NFT projects are still receiving lucrative profits and proving that NFT royalties are a legitimate aspect of the NFT market and web3 as a whole. 

Compared to web2

The blog goes further to state that many popular web2 social media platforms pale in comparison to the amount of revenue that is paid out to their content creators. Based on numbers from Opensea’s blog, it appears that NFT sales alone are significantly better than any other platform. 

• Meta

Meta, one of the strongest proponents of blockchain technology and the metaverse has long been a supporter of NFTs, believing that they are a perfect solution to creating a virtual environment that is filled with unique items and value. 

Despite their optimism for the future, payments to creators were just above $1 billion between July 2021 and the end of 2022, meaning that NFTs were able to achieve the $1 billion mark in a significantly shorter period of time. 

• TikTok

TikTok has quickly become the dominant social media platform for younger audiences with an algorithm that is highly complex and finely tuned to what the user is looking for. Along with short 15-second videos, this has created a viral frenzy for marketing and content creation.

However, in 2020, the company pledged that they would reach the $1 billion mark for creator payments in 3 years which is a stark difference from NFT royalty sales alone in 2022. 

• Snapchat

While less popular than it was a decade ago, Snapchat is still a meaningful social media platform that is used quite widely for its mix of video content and instant messaging applications, but the app only topped out at around $365 million by the end of the year. 

• Youtube

While not listed with the other social media platforms in the blog, YouTube is easily one of the most lucrative content creation platforms that exist right now. However, changes to their monetization rules that are required by corporate sponsors who want to advertise on the platform have caused a lot of difficulties for creators to grow their channels. 

To navigate through this problem, Patreon and other platforms have grown in popularity as a way for many YouTube channels to acquire monetization of their videos without having to sacrifice content or creativity. 

Fortunately, the blog does address numbers given by Patreon and they also make NFT royalties look significantly better. In 9 years of business, Patreon has paid out nearly $3.5 billion to creators which is a tiny amount compared to other figures on this list, especially NFTs. 

The royalty debate

As many have already learned, it pays better to be a part of a successful NFT project than it usually does trading their tokens. In fact, it pays so much better that many projects and platforms were starting to ignore royalty fees because it was eating too far into the profit margins of NFT traders, preventing them from making significant profits. 

While that debate still lives on with many collections, teams, and platforms all being forced to choose a side, it is obvious that the real competition here is between web2 and web3; and, according to the numbers, NFT royalty sales are proving to be a better source of income for creators than any platform on web2.