Most Profitable NFT Projects by Royalty Earnings on Ethereum

What Is The Most Profitable NFT Project On Ethereum?

Yuga Labs is the most profitable NFT project on Ethereum, generating a staggering $178.8 million in royalties from April 23, 2021 to July 12, 2023. This amount is 2.13 times higher than the royalties earned by the second most profitable project, RTFKT, which accumulated $83.7 million in royalties.

Among Yuga Labs' collections, Bored Ape Yacht Club (BAYC), featuring ape digital avatars, has been the most lucrative, bringing in $59.1 million in royalties to date. Otherdeed, the key to owning land in Otherside, follows closely with $53.3 million in royalties. Interestingly, 81.2% of the royalties earned from Otherdeed were generated in the same month the collection launched in May 2022, indicating significant hype surrounding its release. 

The Mutant Ape Yacht Club (MAYC), featuring mutated ape digital avatars, is the third most profitable collection, accumulating $43.7 million in royalties. These three collections account for the majority of Yuga Labs' overall royalty earnings, totaling 87.3%.

The second most profitable project is RTFKT, which accumulated $83.7 million in royalties as of July 2023. RTFKT’s most profitable collection is CloneX, a collaboration with Takashi Murakami, which has generated $37.9 million in royalties. This is followed by CloneX Mintvial and MNLTH, accumulating $13.9 million and $16.4 million respectively. Despite releasing over 20 collections, these three collections constitute most of RTFKT's royalty earnings, accounting for 81.5% of the project's total.

Chiru Labs ranks third in royalty earnings, amassing $59.2 million from January 12, 2022 to July 12, 2023. Most of Chiru Labs' royalties can be attributed to their flagship collection Azuki, which accounts for 75.5% of the company's total earnings. Beanz follows with $12.4 million in royalties, and their latest collection, Azuki Elementals, has already generated $1.5 million in royalties just two weeks after its launch on June 27, 2023 to July 12, 2023.

NFT Royalties Earned by Year on Ethereum

2022: A Record-Breaking Year for NFTs

2022 was the most profitable year for NFT projects on Ethereum, with $330.8 million in royalties, accounting for a staggering 69.6% of the total earned royalties from March 2021 to July, 2023. The top earners were Yuga Labs and RTFKT, bringing in $115.0 million and $57.0 million, respectively. A remarkable newcomer, Chiru Labs, claimed the third spot as one of the most profitable NFT projects, amassing $53.8 million in royalties. Murakami, which launched in 2022, also secured a place among the top 10 projects in terms of royalty earnings.

2021 Sales Constitute 23% of Total Earned Royalties

NFT sales from March to December 2021 constituted 23.2% of the total earned royalties from March 2021 to July 2023, totalling $110.4 million. Yuga Labs took the lead with $41.7 million in earnings, followed by RTFKT with $24.7 million and Parallel Alpha with $18.2 million.

However, while most of the top 10 most profitable NFT projects experienced new all-time highs in terms of royalties earned in 2022, Parallel Alpha experienced a significant decline, earning only $4.8 million, which is 73.5% less compared to their 2021 earnings.

NFT Royalties Earned in 2023 at least 9X Less than 2022

Between January 2023 and July 2023, only 7.2% of the total royalties during this period was earned, amounting to $34.0 million. To put this into perspective, the top 10 most profitable NFT projects would need to earn 9.7 times their current royalty earnings to match their 2022 earnings. This indicates a significant shift in the NFT market, as both collectors and traders are opting to avoid paying royalties altogether, coupled with an overall decline in trading volume from 2022 to 2023.

In terms of NFT collection rankings by royalties earned in 2023, Yuga Labs maintained its lead, securing $22.1 million in earnings, while Chiru Labs surpassed RTFKT to claim the second spot with $5.4 million. RTFKT followed closely with $2.1 million in royalties.

Top 10 Most Profitable NFT Projects by Royalties Earned on Ethereum

When Were NFT Projects on Ethereum Most Profitable?

The Rise of Royalties in 2021 and 2022

The top 10 NFT projects by royalty earnings saw an upward trend throughout 2021 and in 2022, before peaking in April and May. NFT projects experienced a significant surge in profitability, with the top 10 collections amassing a total of $175.5 million in royalties. In contrast, the remaining months of 2022 saw a combined total of $155.3 million for these projects.

Yuga Labs and Proof Collective were noteworthy among these projects, who introduced new collections during this period. Yuga Labs' Otherdeed collection emerged as a standout, generating $43.3 million in royalties alone, which accounted for 48.3% of the total royalties earned by the top 10 projects in May 2022. Similarly, Proof Collective's Moonbirds collection generated $21.2 million in royalties, capturing 24.7% of the total royalties earned by the top 10 projects in April 2022.

Launch Month Royalty Surges

It is a common trend among NFT projects to experience substantial royalty earnings during their launch month. This surge in earnings can be attributed to the increased trading volume that typically accompanies the initial release of a project. One notable example is Chiru Lab's Azuki collection, which debuted in January 2022, and generated $10.9 million in royalties during that month alone. This remarkable sum accounted for 24.4% of the royalties the Azuki collection earned in January alone.

June 2022: Beginning of The Decline

In June 2022, NFT projects witnessed a substantial 88.1% decline in earned royalties, plummeting from a peak of $89.7 million in May 2022 to $10.7 million in June 2022. This reflected the market sentiment following the fall of Terra in May 2022. The collapse of Terra raised concerns among investors regarding the potential contagion effects within the NFT space, resulting in heightened caution and a reluctance to engage with highly speculative digital assets.

H2 2022: Creator Royalties Debate Sends Royalties Spiraling Downwards

In the second half of 2022, the debate surround creator royalties caused a significant decline of 91.0% in royalty earnings for top NFT projects, dropping from $303.5 million in H1 2022 to $27.3 million in H2 2022.

The launch of Sudoswap, a decentralized NFT exchange in July 2022, ignited discussions about the necessity of creator royalties, leading to some NFT marketplaces to adopt optional royalties to attract users. OpenSea responded by introducing on-chain enforcement of creator fees in November 2022, but faced setbacks when a loophole was discovered by Blur in January 2023, leading them to revert to optional royalties without on-chain enforcement in February 2023.

Methodology

This study examines the profitability of top NFT projects royalties earned from their inception up to July 12, 2023. To maintain relevance, data before March 2021 is excluded as it has minimal impact. The analysis solely considers royalty earnings and excludes any other external revenue streams. Royalties were converted to USD according to CoinGecko price data at the time of sale. The study specifically centers on NFT collections built on the Ethereum blockchain and excludes any other NFT collections on different blockchains.

Data was obtained from Footprint Analytics.

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Nicholas Boey

Nicholas is a Market Research Intern at CoinGecko. He can be seen crawling around the vast crypto space, be it NFTs, crypto or memecoins from time to time. People in web3 call him picnicmou. Follow the author on Twitter @picnicmou