ERC-2981 Royalty Payments for NFT

ERC-2981 proposes an essential solution to address the lack of a standardized method for transferring royalties on secondary sales of ERC721 NFTs. Currently, various NFT marketplaces use different formats for handling royalties, leading to a lack of consistency and interoperability across platforms.

By introducing a standard way to implement royalties, this proposal aims to enable NFTs with royalty mechanisms to be accepted and recognized across all participating marketplaces. It offers creators the opportunity to earn ongoing royalties when their NFTs are resold in the secondary market.

The implementation of such a standard is crucial for widespread market adoption. It represents a significant shift for artists as it allows them to receive a share of the proceeds from subsequent sales of their artwork. This is especially beneficial even for successful artists who, in the current system, do not receive any compensation when their works are resold on secondary markets.

Under this proposal, the payment of royalties to the contract would require all royalty-enabled contracts to handle the withdrawal of royalties on their respective NFT contracts. This ensures that the process of royalty distribution is streamlined and consistent across different marketplaces and platforms.

It's important to note that while the standard provides a framework for implementing royalties, individual marketplaces can still choose whether or not to accept such royalty arrangements. If a marketplace opts not to support royalties, creators would have limited control in that particular platform. Nonetheless, the introduction of a standardized approach for royalties is a significant step towards promoting fairness and sustainability in the NFT ecosystem.