What Is EIP-2981? How On-Chain NFT Royalties Work

If you have ever set a royalty percentage while minting an NFT and wondered what actually enforces it, the honest answer is: often nothing does. The technical standard behind most royalty fields is called EIP-2981, and understanding what it covers, and what it does not, will save you from assuming your secondary sales income is more guaranteed than it is.

What EIP-2981 Actually Does

EIP-2981 is a standard way for an NFT smart contract to answer one question: if this token sells for a given price, who should receive a royalty, and how much. A marketplace can call a function on the contract and get back a recipient address and a percentage. That is the entire scope of the standard. It is a shared format for communicating royalty terms, similar to how a shipping label communicates an address without making the courier deliver the package.

This matters because before EIP-2981 existed, every marketplace invented its own royalty system, stored off-chain in its own database. A creator’s royalty on one platform meant nothing on another. EIP-2981 gave the information a standard home on the contract itself, so any marketplace that chooses to read it can.

The Part Creators Often Miss

The key phrase above is “chooses to read it.” EIP-2981 has no mechanism to require payment. A marketplace can read the royalty field, show it to users, and then let a sale go through without sending a cent to the creator. The standard was deliberately kept narrow: it is a reporting interface, not a payment contract, because blockchains cannot force an external platform to act on information it receives.

This is not a hypothetical gap. Several major marketplaces moved from enforcing creator royalties by default to making them optional, letting buyers and sellers decide whether to pay them at checkout. That shift was controversial precisely because many creators had priced their mint assuming royalties were a reliable, ongoing revenue stream rather than a polite suggestion.

How Marketplaces Tried to Add Enforcement

Because EIP-2981 alone could not guarantee payment, parts of the industry built extra layers on top of it:

• Operator filter registries. Some marketplaces deployed shared registries that a collection’s contract could reference to block transfers through venues that do not honor royalties. In effect, the NFT itself refuses to move through a non-paying marketplace.
• Transfer-restricted contract standards. Newer contract designs extend the base NFT standard with built-in logic that checks a marketplace’s compliance before allowing a transfer, rather than relying on an external registry.
• Off-chain royalty databases. Some platforms still keep their own internal royalty settings independent of what is written on-chain, which is exactly the fragmentation EIP-2981 was meant to fix.

None of these approaches are universal. A collection enforced on one marketplace can still trade royalty-free on another that does not participate in the same registry or standard. If you are evaluating a project’s royalty claims, the honest question to ask is not just “what percentage,” but “enforced where, and by what mechanism.”

What This Means If You Are Minting Your Own NFTs

If you are setting a royalty percentage through an app like Simple NFT Creator or any minting tool, a few practical points are worth keeping in mind:

• Setting a royalty field is a signal, not a contract in the everyday sense of the word. It tells marketplaces your preferred rate, it does not compel them to collect it.
• Primary sales, meaning the first sale straight from you to a buyer, are not affected by any of this. You receive that payment directly, with no royalty question involved.
• Royalties only apply to secondary sales, when someone resells the NFT to another buyer later. Treat any royalty income as a possible bonus on top of your primary sale, not as guaranteed recurring revenue.
• If royalty income genuinely matters to your project, check whether the specific marketplaces your buyers use actually honor the royalty field before you rely on it financially.

A Simple Way to Remember It

Think of EIP-2981 as a name tag, not a lock. It clearly labels who should get paid and how much, and well-behaved marketplaces will read that label and act on it. But a name tag cannot stop someone from ignoring it. The additional enforcement layers, like operator filters and compliance-aware contract standards, are the closest the ecosystem has come to turning that name tag into something closer to a lock, and even those only work where the marketplace agrees to participate.

The Bigger Picture

Royalty enforcement has been one of the more contentious topics in NFTs, precisely because it touches real income for working artists. The underlying standard, EIP-2981, solved the easier half of the problem: giving every marketplace a common place to find royalty terms. The harder half, making sure those terms are respected everywhere, is still being worked out marketplace by marketplace rather than guaranteed by the blockchain itself. Knowing that distinction helps you set realistic expectations, whether you are minting your own work or buying a piece from a creator you want to support long term.

If you want to mint your own NFTs and set royalty terms with a clear understanding of what they do and do not guarantee, you can create and mint your collection directly from your phone with the Simple NFT Creator app, available on the App Store and Google Play.