NFT Marketplace with Enforced Royalties: Building Creator-First Marketplaces

Introduction

NFT marketplaces have become the backbone of the digital creator economy, but many platforms have struggled with royalty enforcement. As marketplaces compete on fees, creator royalties have often been sacrificed, undermining the long-term sustainability of the NFT ecosystem.

This case study details how we built an NFT marketplace with on-chain royalty enforcement, supporting multiple royalty standards, transparent fee structures, and creator-first economics that ensure creators are fairly compensated for their work.

The Royalty Problem

Traditional NFT marketplaces face a critical issue:

Royalty Bypassing — Marketplaces compete by removing or reducing royalties
Off-Chain Enforcement — Royalties enforced off-chain can be easily bypassed
Fragmented Standards — Multiple royalty standards (ERC-2981, Manifold, etc.)
Creator Disempowerment — Creators have no control over secondary sales
Platform Competition — Race to zero fees hurts creators

Clients needed a marketplace that guarantees creator royalties while remaining competitive and user-friendly.

Solution Architecture

Core Components

Marketplace Smart Contracts

Listing and sale execution
Royalty calculation and distribution
Multi-standard royalty support
Fee management

Creator Tools

Royalty configuration interface
Analytics dashboard
Payment tracking
Collection management

User Interface

Browse and discover NFTs
Wallet integration
Purchase flow
Collection pages

Backend Services

Metadata indexing
Image optimization
Search and filtering
Analytics and reporting

On-Chain Royalty Enforcement

ERC-2981 Standard Support

The marketplace implements ERC-2981 (NFT Royalty Standard):

function royaltyInfo(uint256 tokenId, uint256 salePrice)
    external view returns (address receiver, uint256 royaltyAmount)

This standard provides:

Standardized Interface — Works across all ERC-2981 compatible contracts
On-Chain Enforcement — Royalties calculated and enforced in smart contracts
Flexible Configuration — Creators set royalty percentage per token or collection

Multi-Standard Support

Beyond ERC-2981, the platform supports:

Manifold Royalty Registry — Alternative royalty standard
Custom Royalty Contracts — Creator-defined royalty logic
Collection-Level Defaults — Set royalties at collection level
Token-Level Overrides — Individual token royalty settings

Royalty Calculation

Royalties are calculated and distributed automatically:

Sale Execution — NFT transferred to buyer
Royalty Lookup — Query royalty info from token contract
Royalty Calculation — Calculate royalty amount from sale price
Distribution — Transfer royalty to creator, remainder to seller
Platform Fee — Optional platform fee on top of royalty

Smart Contract Architecture

Core Contracts

Marketplace Contract

Handles listings, offers, and sales
Enforces royalties on every transaction
Manages platform fees
Supports multiple payment tokens

Royalty Registry

Stores royalty information
Provides royalty lookup service
Supports multiple royalty standards
Allows creator updates

Payment Handler

Distributes payments to sellers
Distributes royalties to creators
Handles platform fees
Supports ERC-20 and native tokens

Security Features

Reentrancy Protection — Prevents reentrancy attacks
Access Control — Role-based permissions
Pausable — Emergency pause functionality
Upgradeable — Proxy pattern for upgrades

Creator Tools & Dashboard

Royalty Configuration

Creators can configure royalties through:

Collection Settings — Set default royalty for entire collection
Token Settings — Override royalty for specific tokens
Royalty Recipients — Set multiple recipients with split percentages
Royalty Caps — Set maximum royalty percentage

Analytics Dashboard

Creators get insights into:

Sales Volume — Total sales and revenue
Royalty Earnings — Royalty income over time
Top Collectors — Most active buyers
Price Trends — Floor price and volume trends
Geographic Data — Sales by region

Payment Management

Automatic Payouts — Royalties automatically distributed
Payment History — Complete transaction history
Multi-Wallet Support — Receive payments to multiple wallets
Tax Reporting — Export data for tax purposes

User Experience

Discovery & Browsing

Collection Pages — Showcase collections with stats
Advanced Filters — Filter by price, traits, rarity
Search Functionality — Search by name, description, traits
Trending Collections — Highlight popular collections

Purchase Flow

Browse — User discovers NFT
View Details — See metadata, traits, history
Check Royalty — Transparent royalty display
Connect Wallet — MetaMask, WalletConnect, etc.
Approve & Purchase — One-click purchase flow
Confirmation — Transaction confirmation

Listing & Selling

Easy Listing — Simple interface for listing NFTs
Price Suggestions — AI-powered price recommendations
Bulk Listing — List multiple NFTs at once
Offer Management — Accept, reject, or counter offers

Fee Structure

Transparent Fees

The marketplace uses a transparent fee structure:

Platform Fee — Small percentage (typically 2-3%)
Creator Royalty — Set by creator (typically 5-10%)
Gas Optimization — Batch transactions to reduce gas

Fee Distribution

Seller Receives — Sale price minus royalty and platform fee
Creator Receives — Royalty amount automatically
Platform Receives — Platform fee for operations

Technical Implementation

Frontend Stack

React/Next.js — Modern web framework
Web3 Integration — ethers.js or web3.js
Wallet Connect — Multi-wallet support
IPFS Integration — Decentralized metadata storage

Backend Services

Indexing Service — Index blockchain events
Metadata Service — Fetch and cache NFT metadata
Image Service — Optimize and serve images
Search Service — Full-text search capabilities

Smart Contract Stack

Solidity — Smart contract language
Hardhat/Foundry — Development framework
OpenZeppelin — Security libraries
Upgradeable Proxies — Upgradeable contracts

Security Considerations

Smart Contract Security

Multiple Audits — Professional security audits
Formal Verification — Mathematical proof of correctness
Bug Bounty Program — Incentivize security research
Timelock Controls — Delayed admin actions

User Security

Wallet Integration — Non-custodial wallet support
Transaction Verification — Clear transaction previews
Phishing Protection — Domain verification
Rate Limiting — Prevent abuse

Business Model

Revenue Streams

Platform Fees — Small percentage on each sale
Listing Fees — Optional fees for premium listings
Featured Listings — Promoted collection placements
API Access — Premium API for developers

Creator Benefits

Guaranteed Royalties — On-chain enforcement
Analytics Tools — Free analytics dashboard
Marketing Support — Featured placements
Community Building — Tools for community engagement

Challenges & Solutions

Technical Challenges

Gas Costs — Optimized contracts to minimize gas
Royalty Lookup — Efficient royalty querying
Multi-Chain Support — Cross-chain marketplace

Business Challenges

Competition — Differentiate through creator focus
User Acquisition — Marketing and partnerships
Liquidity — Attract buyers and sellers

Results & Impact

Clients using the marketplace have experienced:

100% Royalty Compliance — All royalties enforced on-chain
Increased Creator Revenue — Creators earn more from secondary sales
Higher Trust — Users trust royalty enforcement
Better Creator Relations — Strong creator partnerships

Future Enhancements

Planned improvements:

Cross-Chain Royalties — Royalties across multiple chains
Dynamic Royalties — Royalties that change based on conditions
Royalty Marketplace — Trade royalty streams
Advanced Analytics — AI-powered insights

Conclusion

NFT marketplaces with enforced royalties are essential for the long-term health of the creator economy. By implementing on-chain royalty enforcement, supporting multiple standards, and providing creator-first tools, we’ve built a marketplace that ensures creators are fairly compensated while remaining competitive and user-friendly.

The future of NFTs depends on sustainable creator economics, and on-chain royalty enforcement is a critical step toward that future.