The ongoing use of creative works has been challenging to address through the conventional royalty system. As a result, creators can face fraudulent activities such as unclear ownership and royalty distribution. Distributors take a long time to make payments, while the process of determining royalties is non-transparent in most cases. Moreover, middleman fees reduce creator profits. Imagine an artist trying to get the money they deserve from various music streaming platforms where their song is played. Frequently, this involves a complex contract with multiple parties, and it becomes very hard to follow up on usage and ensure appropriate compensation.
Luckily, the rise of blockchain technology is bringing about a solution that gives power back to creators and builds a fairer system.
Blockchain Revolutionizes Royalties with NFTs
Non-Fungible Tokens (NFTs) are changing how royalties are done. Here’s why:
- Smart Contracts: These contracts pay creators automatically using pre-set conditions within them. This can help minimize human errors when calculating amounts payable, ensuring that all artists receive what belongs to them whenever it is due. Consider a situation where a photographer uploads his work in the form of NFTs, such that every time they sell one through these secondary markets, some percent of this purchase price goes directly into their wallet.
- Immutable Ledgers: The blockchain technology has created a robust secure transaction of ownership and history. Such resolution precludes any disagreement and highlights the way the royalties are calculated. No longer do people have to use difficult excel sheets or fathomless accounting procedures. The ledger in blockchain operates as public records, which anyone can access thus encouraging trust and clarity.
- Transparency: Blockchain’s public ledger lets everyone see how royalties are calculated to build trust. In contrast, creators can observe where their payments come from because they are familiar with how royalties are calculated.
- Disintermediation: Creators’ share of revenue increases when NFTs are used instead of intermediaries. In this regard, distributors or any other intermediaries may have been needed before, requiring them to pay a portion of their income. Using NFTs and blockchain technology, artists can directly connect with their audience while retaining a higher share of profits.
This system would enable creators to receive a percentage of every transaction involving their work being resold perpetually. For example, if you sold your album as an NFT, you could still make money even years after its initial release should it be resold on a secondhand marketplace.
Freename Royalties: Earning Through Web3 TLDs
Freename uses blockchain technology to introduce an unprecedented royalty model based on Web3 TLDs (Top-Level Domains).
What are Web3 Domains and TLDs?
Web3 Domains: These are multi-utility NFTs that act as distinct web addresses. They provide more than traditional domains such as increased control and ownership for users. Consider a website owner with a standard “.com” domain name. For Web3 domains, they possess the whole domain in form of an NFT, which empowers them to exercise more authority over its employment and possible revaluation.
Web3 TLDs: Imagine them as the add-ons at the terminus of a web address, such as “.com” or “.org.” But in Web3, users can invent and possess their personal TLDs like “.art” or “.music.” And here is where it gets really exciting: you make royalties whenever someone registers a domain name with your Web3 TLD using Freename.
Owning a “.art” TLD in Freename can be likened to being the copyright holder of “.com” domains specifically for artists. Whenever anyone registers a domain name ending with your TLD such as “davinci.art” or “modern.art,” you will earn some part of the registration cost. This gives artists an additional source of income that allows them to make money out of their creativity other than selling their works directly.
How Does Freename Royalties Work?
Earning royalties on Freename is very straightforward:
- Create a Web3 TLD: If you register an unique TLD at Freename, you’ve effectively claimed ownership of the extension. This will enable you to have exclusive ownership of a particular extension. Imagine someone who has come up with a new TLD called “.photography”. Thus, they would hold the rights to receive royalties on all the domain registrations ending with “.photography.”
- Activate Your Royalty License: You must make a one-time payment to activate your TLD’s royalty license. Once activated, any domain registered within your TLD qualifies you to earn royalties. You just pay once and then enjoy passive earnings from your TDL.
- Earn Royalties: This amounts to up to 50% of the total domain registration fees on each member’s wallet by automatically distributing them through the freename.net system. This type of revenue continues so long as anyone applies under your root; take the example of .photography,, they receive some money every time someone uses dot photography in their domain registration. This becomes profitable, especially if your TLD gains popularity within a niche area.
Freename employs blockchain technology to automate and ensure transparent royalty distribution instead of intermediaries. Traditionally, a registrar would hold back royalties for some time before transmitting them to the rightful owner. However, with Freename, smart contracts have allowed royalties to be distributed automatically; hence, no human input is necessary for creators’ earnings.
Take a look at this YouTube explanation to learn more about Freename royalties.
Why get paid through Freename?
Below are some benefits of Freename’s Web3 TLD system that allow you to earn royalties:
- Full Control: In case you are wondering about how the ownership of your minted TLD is structured, here is a simple explanation; you are the one with complete control over it. Thereafter, you will decide whether or not to enable the royalty license besides being at liberty to determine its usage. For example, a developer could mint the .dev TLD and keep it for their own projects or they could lease it out to other developers for a fee.
- No More Ownership Disputes: Ownership of your top-level domain (TLD) is not a matter of dispute or confusion due to the security and transparency that comes with blockchain technology, which is not the case with traditional domain registration relying on centralized authorities. While traditional domain registration can have problems around who owns what, blockchain establishes a permanent trail of ownership for your TLD.
- Automated Payments: Royalty payments are made using smart contracts; hence, you receive them directly without necessarily going through manual procedures. Chasing or waiting for invoices is no longer necessary since an automated system guarantees swift payment of your royalties.
- Perpetual Royalties: Unlike traditional royalties with limitations, Freename’s system permits you to earn royalties even on future secondary domain registrations within your Level Domain. This means you can get an advantage from what you created for many years to come. Think about the potential TLD owner of “.photography”. Even if someone acquires the “stunningshots.photography” domain and resells it in the subsequent years, a royalty would still be paid to the original TLD owner upon this second sale. It opens up opportunities for passive income creation in the long run.
Web3 and the Future of Royalties
Freename’s royalty system demonstrates how Web3 is transforming NFTs and blockchain technology. Now, creators from various sectors, including artists, musicians, writers, developers, etc., can establish transparent royalty structures. In addition, they can claim payment for their work and help create a more sustainable creative environment.
Imagine a filmmaker who mints their movie as an NFT with a smart contract and royalty structure. Whenever there is reselling or online streaming of that NFT, some money will automatically go back to the filmmaker as revenue sharing. Henceforth, creators will take control of their work and ensure fair remuneration.
Unleash Your Earning Power
Are you keen on unlocking Web3 potential while obtaining royalties from your digital creations?
Join Freename now to learn how it feels to mint your own Web3 TLD at no extra charge.
