Introduction

With the rise of Web3 and the introduction of NFTs, many players such as traditional artists, digital artists, sports clubs, DAOs, and many many more have migrated to this new space to pursue novel methods of generating income. Regardless of the player, every NFT creator, either individuals or entities, heavily values the royalty fees generated from the secondary markets sales of their NFT collections. In this analysis, the royalty payouts by NFT marketplaces of OpenSea, X2Y2, LooksRare, and Rarible on Ethereum have been evaluated over the past 3 months, with the possibility to investigate other periods.

Conclusion

In conclusion, the analysis of royalty payouts on different NFT marketplaces on Ethereum has demonstrated that OpenSea has by far paid the highest total royalties to its creators compared to X2Y2 and LooksRare. While the sales of these two marketplaces are catching up to the sales of OpenSea and are surpassing it in the case of X2Y2, the volume of paid royalties has had a considerable difference. OpenSea has paid nearly 6% of its total sales volume and more than double its earnings to the NFT creators. On the contrary, X2Y2 and LooksRare have paid less than 0.5% of their total sales volume and less than 40% of their income to their NFT creators. The buyers on OpenSea are paying more fees on average for their desired NFTs, expectedly. From the NFT collections perspective, NFTs on OpenSea could be considered higher quality or better known compared to X2Y2 and LooksRare based on the higher average of generated fees for their creators. Even in the case of similarities of collections between marketplaces, it could be concluded that OpenSea generates more income for NFT creators. Last but not least, while the daily averages have stayed relatively the same for each marketplace over the past few months, the values for OpenSea have had a slight downtrend that shows the decline of NFT sales on the platform.

• The analysis of the sales volume, earnings, and royalty payouts of all of the marketplaces on Ethereum has demonstrated that 3 marketplaces of Larva Labs, NFTX, and Sudoswap have not paid any royalties to their creators;

• Interestingly, X2Y2 has become a larger marketplace than OpenSea and its sales volume has gone neck and neck. Besides these two, LooksRare has also had a considerable sales volume slightly below half of the top two marketplaces;

• Nevertheless and although X2Y2 and LooksRare have seen a major jump in their sales volume and earnings, the majority of royalties, if not almost all, were paid to creators by OpenSea;

• Rarible as one of the old marketplaces with a niche set of collections has also paid a negligible amount of royalties to creators on its platform;

• The average daily royalty payouts on OpenSea have been around 30 times higher than on X2Y2 and LooksRare;

• The high number of daily transactions on OpenSea has balanced the average payouts per sale. However, the comparison of LooksRare and X2Y2 with relatively similar daily payouts has shown that each sale on LooksRare produces a higher value for creators compared to X2Y2;

• In terms of the percentage of royalties over the sales volume, OpenSea users (buyers) on average have paid nearly 6% of their purchases as fees to the creators. On the other hand, LooksRare and X2Y2 have paid less than 0.5% of their sales volume to the NFT creators. Surprisingly, Rarible has been more generous, and around 2.5% of its sales volume has been paid to the creators on its platform;

• Overall, the values for Rarible massively fluctuate daily due to the lower number of transactions on the platform. This also indirectly indicates that the royalties are heavily affected by the NFT collection itself;

• By calculating the percentage of royalties from the earnings of each marketplace, it has been determined that OpenSea is paying more than double its income to the NFT creators. While Rarible also pays slightly more than its earnings, X2Y2 and LooksRare take a bigger cut from the sales for themselves and have paid less than 40% of their income to their creators;

• It is worth mentioning that the royalty payouts on X2Y2 have increased substantially since mid-September to levels even higher than 100%, which shows that it has become more favorable for the creators;

• On average, buyers on OpenSea have paid the highest NFT creator fees 1.5 times higher than buyers on LooksRare, and 5 times higher than buyers on X2Y2;

• On a daily basis though, LooksRare has had repeating fluctuations and there have been numerous days that its users paid more fees compared to OpenSea;

• From the NFT collection perspective, collections on OpenSea have generated immensely higher royalties for their creators compared to other marketplaces. In case of lack of similarities between the collection on each marketplace, this indicates the existence of higher quality collections, or would be better to call well-known collections, on OpenSea compared to the others;

• The average generated royalty per NFT has been higher on OpenSea, in line with the collection data. However, the difference between NFTs on X2Y2 and LooksRare is not drastic;

• While the daily averages have stayed in a relatively similar range for each marketplace over the past few months, the values for OpenSea have had a slight downtrend, which indicates that the sales on the platform have started to decline.

Methodology

All of the data for this analysis were solely selected from the ez_nft_sales table of the core schema of the Ethereum database. The royalty fees of NFT creators were calculated using the creator_fee column and the summations of platform_fee column data were considered as the earnings of each marketplace. The royalty values for each marketplace were divided by different variables to obtain a variety of averages to be able to better compare marketplaces with one another. It is worth mentioning that all the values are in U.S. dollars and the date range of the analysis could be altered using the parameter dropdown above.

Insights