Transcript Ep. 414: Are NFT Royalties the Way? How to Build a Sustainable Creator Economy

Laura Shin:

Hey, all. As you know, there are a lot of changes happening right now in the world of NFT royalties. I invited Sterling Crispin and Holly Herndon, who are both creators familiar with the NFT world to discuss how creators can earn money using blockchain technology, regardless of whether it’s through royalties or some other fashion. We looked at how it is that creators currently make money in the traditional system, what financial problems need to be solved for them, why NFT royalties have been so helpful to creators, and what other ways they can earn regular income if not from royalties. My main takeaway after our discussion is that this isn’t an easy problem to sold, and a one-size-fits-all solution does not make sense since creators and their offerings are so diverse.

After we wrapped, Sterling said he had meant to offer a rebuttal to people who suggest Harberger taxes as a substitute for NFT royalties. Harberger taxes require all members of a population to declare a price at which they’re willing to sell the property they own and then to pay a tax on that value. Meanwhile, anyone who offers to buy the property at the price can just buy it. Sterling wanted to point out that this method benefits rich people who could easily pay whatever amount people said, whereas everyday people might even struggle to pay the tax even though they are the ones setting it themselves.

I also wanted to note that this last week, LooksRare went to a zero royalty model but began setting aside 25 percent of its platform fees for creators. They made this announcement after we recorded, which is why we do not discuss this new development during the show. And now here’s my conversation with Sterling and Holly.

Hi, everyone. Welcome to Unchained. Your no-hype resource for all things crypto. I’m your host, Laura Shin, author of the Cryptopians. I started covering crypto seven years ago, and as a senior editor at Forbes was the first mainstream media reporter to cover cryptocurrency full-time. This is the November 1, 2022 episode of Unchained.

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Today’s topic is NFT royalties. Here to discuss are Sterling Crispin, artist and software developer, and Holly Herndon, musician, artist, and host of the Interdependence Podcast. Welcome, Sterling and Holly.

Sterling Crispin:

Hey.

Holly Herndon:

Hi.