How do NFT royalties work?
Can anyone explain how royalties work? I can't understand how you can have an 'automatic' royalty based on a percentage (of sale price I assume?)? How can the token be aware of the sale price? Unless it's locked into some proprietary platform but wouldn't that make it far less valuable than a token you can transfer freely?
If there is a royalty based upon sale price, why wouldn't buyers and sellers just understate the sale price?
I can understand how you could have a static/fixed or graduating ETH fee in order to be able to transfer the NFT but how could this be aware of the sale price?
Also what are the favored standards for creating art NFTs that would be most compatible with the best platforms for initial sale and later resales?
"Some NFTs will automatically pay out royalties to their creators when they're sold. This is still a developing concept but it's one of the most powerful. Original owners of EulerBeats Originals earn an 8% royalty every time the NFT is sold on. And some platforms, like Foundation and Zora, support royalties for their artists.
This is completely automatic so creators can just sit back and earn royalties as their work is sold from person to person. At the moment, figuring out royalties is very manual and lacks accuracy – a lot of creators don't get paid what they deserve. If your NFT has a royalty programmed into it, you'll never miss out." – https://ethereum.org/en/nft/