NFTs are digital assets with numerous use cases. When most people think of NFTs though, they think of art, collectibles, and profile picture projects. These types of assets represent being part of a community. In many ways, the success of the project revolves around the nature and strength of the community.

It’s one reason why BAYC is so expensive. It’s part of why so many other project NFTs are so expensive, even though they appear to provide little to no utility. Without the community, there would be essentially no value. But with a solid community, they can skyrocket in price.

But it costs money to give really nice things to a community. So the founders of many NFT communities have set up royalties. These royalties can be, and should be, used to give continued funding to the project, as well as to the artists of the NFTs themselves. NFT royalties range, and are built into the NFT exchanges, rather than into the NFTs themselves.

One can also think of these fees as exit fees. When a person sells, they are leaving the community. And, in order to help the next generation of community members, there’s a small fee attached. The fee also has a negligible effect on price and rate at which these assets are purchased and sold.