Why Selling All Rights With Your NFTs is a Bad Idea

Selling rights can be a powerful tool, but make sure to consider all of the possibilities

Collectors are the lifeblood of any artist’s career. Without them, artists wouldn’t be able to be adequately compensated for their work, and worse, they might never be certain that their art is valued by someone at all! To wit, most artwork that is purchased on the primary and secondary markets, whether traditional or crypto, does not come with any commercial rights whatsoever. And yet, these markets thrive!

The beautiful thing about NFTs is that artists have a bigger say than ever about how business is conducted. But with this power comes great responsibility. Do you think Dali would have made a habit of selling the commercial rights to his painting NFTs bundled with the original? No. Serious artists will only ever agree to sell rights on commissioned work, and even then, it may come with royalties on the commercial application. This is how the music industry has always worked, however exploitative the arrangement is to musicians.

Some musicians have even fought tooth and nail to get the rights to their master recordings back from the record companies that purchased them when the artist was younger and less knowledgeable. Often, they are unsuccessful. Why aren’t labels eager to give these pieces of paper back to the people who rightfully created the work in the first place? Simple: rights are power! Here is why completely selling all of your rights to your work is a bad idea if you’re a serious artist:

It caps your upside

If you retain rights through your NFT sale, your upside is always unlimited. Anything can happen, and you will always be able to take part in the payoff! If you sell your entire work with all rights included, you’re saying to yourself “I’m OK with taking a fixed amount of money now and giving up everything that could happen.” I’m not making a judgement or a prediction, but realize this is the question you’re asking yourself.

What if you sell your brilliant pop song to a marketing genius and they turn it into a hit? Sure, they definitely do a huge amount of work and deserve their payday, but the song needs to exist first! You may see other opportunities arise from that scenario, or you might not. But I think it would feel bad to get shut out of the financial benefits. It’d feel like selling all your crypto in 2017 (I’ve done that!) — but even worse, because it’s your own work!

It relinquishes control of your future

Yes, artists can take a percentage of each re-sale (however, this is inconsistent across platforms right now unless your royalty data is on-chain). But what if your patron sells fractional shares of the NFT? For instance, they hold a song NFT in their wallet, but then sell fractional shares where owners of each share get a portion of the streaming profits. So now you have an entire fractional market for shares of your song. Do you a cut of those sales?

Or what if your collector has built a reputation around their collection but gets canceled for some heinous act, and you become associated? What if their wallet security becomes compromised and your arrangement leaves you with no recourse to protect your work?

If you go this route, you have to be extra diligent about who you’re doing business with. This will always be the case for serious, high-quality artists, but especially so if your model includes signing away commercial rights.

It’s bad for other artists

It’s a tale as old as modernity: the artist lowballs their prices (whether shy, unconfident, or just plain green) and undercuts the value of the entire market by selling below their value. From the start of my career in graphic design ten years ago, to video editing and UI/UX today, I’ve had to weed out the people who think they can get my work for an insulting arrangement. By simple market mechanics, why do they think they can get those prices in the first place? No one assumes a lawyer or plumber will be cheap to hire. The best among us have worked tirelessly and uncompensated for decades to hone their artistic craft.

Point being: new, emerging, and established artists alike sometime give away more than they need to, because they feel like they have to. This is bad business.

If more artists start giving away their rights, then the market follows suit, and the expectation will eventually be set that artists give away rights with NFT sales. Why would collectors agree to anything less? By selling rights, you have to contend with the fact that you’re potentially making it harder for other members of the community who don’t want to sell rights.

A better idea

There’s no denying it: utility is a huge incentive for collectors. In fact, I actually do think you would do well to sign away rights to your work. I’m not saying that it’s always a bad idea. I’m saying selling the entirety of the rights to your work is almost always a bad idea. Collectors are our friends, and it’s much more powerful and mutually beneficial to use NFTs to form active partnerships. Web3 is about economic links. Create incentives not only to purchase your work, but for your buyer to become a valued partner on your mutual journey!

For instance, my genesis token gives the collector 50% of my debut feature film’s streaming revenue. That’s forever, for whoever currently owns the token! Soon, I’ll be writing another article on why you should be guaranteeing your rights arrangement with on-chain metadata.

Since I’m in the film world, I’ll give you a case study: I commend Kevin Smith, who in mid-April announced his Kilroy Was Here NFT would sell the movie’s entire project files and all of its rights. He said, “What you get is the whole movie, with the hard-drive files, in the real world… someone can buy it and just put it on their shelf and never show it again.” But a few weeks later, he revised his arrangement so that the NFT releases only the distribution rights to Kilroy Was Here. This is a much more mutually beneficial arrangement for both filmmaker and collector, so that they both can collect revenue from the movie when his NFT eventually launches on Phantasma.

If you want to sell the commercial rights to your work, think about it thoroughly. Consider writing your token’s metadata so that you earn a royalty each time the collector profits from their use of it. For instance, if you sell a song you wrote, maybe you are entitled to a small percentage of the total streaming profits that the collector makes. Remember, if your work is truly worthwhile, your collector can always potentially profit from the secondary market alone!


This advice only applies to artists whose work is high-quality enough to profit from commercial exploitation in the first place. I write for artists who are in it for the long haul: serious painters, imagemakers, filmmakers, and musicians who plan to build careers. This advice does not apply to collectible projects (which can benefit much more from release of commercial rights) and people who are only in art, NFTs, and crypto to try to make quick cash.

Zach Lona is a multimedia artist and creative director at Eleusinian Productions. He offers consultation on NFT strategy for serious artists and on story development for serious filmmakers. Inquires at eleusinianvisions@gmail.com.