Jack Butcher’s position on NFT royalties – that they’re just a fancy way of “getting paid on churn” – is one that lit the NFT community on fire. Yet is he simply a contrarian, or is he really signaling a deep-rooted problem with the so-called Web3 utopia? I’m hoping it’s the latter. Yet these realities challenge us to confront hard truths about creator compensation, market incentives, and what digital ownership truly means.

Royalties: Digital Feudalism?

The promise of NFTs was simple: give creators direct control and a cut of every subsequent sale. At last, creators would be free from the oppressive control of gatekeeping galleries and labels. What if this seemingly benevolent system is actually a form of digital feudalism, where creators become reliant on perpetual transaction fees rather than creating groundbreaking new work?

Think about it: Butcher, who built Visualize Value into a powerhouse before NFTs, understands the power of direct engagement. He’s not against paying artists — he ducked that question — he’s against relying on resale markets for your survival. It's like a restaurant owner focusing on selling the same plate of pasta over and over, instead of innovating with new dishes and attracting new customers. Where's the incentive to push boundaries when you're guaranteed a slice of the pie every time someone flips your digital asset?

This is not simply a fungible issue of cash, as it is a concern of motivation. Are we building a Web3 that rewards creators for pumping out derivative works inspired by whatever’s hot right now? Or are we just creating a system that encourages them to create the same derivative, unchallenging art that everyone else is making? Even though Butcher’s Checks and Opepen projects were very successful, they were experiments. Experiments, as any good experiment, should inform the work that follows, not be the permanent source of funding.

Web3's Regulation Vacuum

The royalty debate exposes a gaping hole in Web3: the lack of clear regulatory frameworks. We are currently working in a Wild West on a realm where the rules are being determined as we progress. Second, is an NFT royalty a legally enforceable contract? Is it intellectual property? The answers will understandably be different across jurisdictions, resulting in a confusing and possibly conflicting patchwork of laws.

Now, picture a world where such NFTs are a matter of international trade agreements. A royalty structure that’s completely legal in one country may be illegal in another. This disparity leaves both creators and collectors in a legal limbo. This uncertainty creates a toxic environment for anxiety and innovation alike.

The claim that royalties are “baked into the smart contract” can only carry one so far. Smart contracts are code, not law. But all of them can be easily gotten around or exploited, or just plain flouted if they transgress established tenets of law. We need to get beyond the magical thinking of the belief that code is law. Now it’s time to have some real conversations about how to govern this wild west prudently.

Beyond Royalties: Sustainable Models

Therefore, if royalties aren’t the solution, what is? Butcher's own trajectory offers clues. He cultivated a brand, a community, a name for himself as an artist before really taking the plunge on NFTs. He used the internet, like Naval Ravikant told you to, to produce more value than he captures and gain a following of incredibly loyal fans.

These models are not mutually exclusive. A successful creator might fund more projects through NFT sales and provide NFT holders with exclusive content. The trick, Mata advises, is to have multiple income streams and not use royalties as a crutch.

  • Patronage: Platforms like Patreon allow fans to directly support their favorite artists.
  • Grants: DAOs and other organizations can provide funding for promising projects.
  • Direct Funding: NFTs can be used to crowdfund specific projects, giving creators the resources they need to bring their visions to life.
  • Premium Content & Access: NFTs can evolve into access passes, granting benefits to community members.

Butcher’s “be the best in the world at what you do” mantra is important for a reason here. Stop worrying about money and start concentrating on producing great content, establishing a recognizable brand, and truly connecting with your audience. The money will follow.

At its core, the debate around NFT royalties is a philosophical discussion. Is this the kind of Web3 we want creators to be forever dependent on transaction fees for? Or do we want to create a future that equips them to develop sustainable businesses and produce innovative artistry? I choose the latter. Butcher’s views, of course, would generate a firestorm. They provoke us to come to terms with the hard realities of the future we are fostering. Are we up to the challenge?

Ultimately, the debate over NFT royalties is a philosophical one. Do we believe in a Web3 where creators are perpetually dependent on transaction fees, or one where they're empowered to build sustainable businesses and create groundbreaking art? I choose the latter. And while Butcher's views may be controversial, they're forcing us to confront the uncomfortable truths about the future we're building. Are we up to the challenge?