How to Calculate NFT Royalty Revenue
What is NFT Royalty Revenue?
The NFT Royalty Revenue Calculator projects ongoing creator royalty income from secondary market sales of NFTs, factoring in collection floor price, trading volume, royalty percentage, and marketplace enforcement rates.
Formula
Monthly Royalty Revenue = Monthly Secondary Volume × Royalty Rate × Enforcement Rate
- V
- Monthly Volume (ETH) — Total secondary market trading volume per month
- R
- Royalty Rate (%) — Creator royalty percentage set in the smart contract
- E
- Enforcement Rate (%) — Percentage of marketplaces that honor the royalty
- N
- Collection Size (NFTs) — Total number of NFTs in the collection
Step-by-Step Guide
- 1Enter the total number of NFTs in your collection and the average secondary sale price
- 2Set the creator royalty percentage (typically 2.5-10%)
- 3Estimate the monthly sell-through rate (percentage of collection that trades)
- 4Apply the marketplace enforcement rate (not all marketplaces honor creator royalties)
Worked Examples
Input
10,000 NFT collection, 0.5 ETH avg price, 5% royalty, 8% monthly turnover, 60% enforcement
Result
Monthly volume = 800 sales × 0.5 ETH = 400 ETH, Royalties = 400 × 0.05 × 0.60 = 12 ETH/month
Input
1,000 PFP collection, 2 ETH floor, 10% royalty, 3% monthly turnover, 80% enforcement
Result
Monthly volume = 30 × 2 = 60 ETH, Royalties = 60 × 0.10 × 0.80 = 4.8 ETH/month
Common Mistakes to Avoid
- ✕Assuming 100% royalty enforcement — many marketplaces now make royalties optional
- ✕Using mint price instead of current floor price for revenue projections
- ✕Not accounting for declining trading volume as collection age increases
Frequently Asked Questions
What is the standard NFT royalty rate?
Most collections set royalties between 2.5% and 10% of secondary sale price. The most common rate is 5%. Higher rates can discourage trading, while lower rates provide less creator income.
Are NFT royalties enforceable?
On-chain royalties (EIP-2981) are a suggestion, not enforced at the protocol level. Marketplaces like OpenSea honor them, but others like Blur have made them optional, reducing average enforcement to 50-70%.
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