The Role of Escrow in the Resale of NFTs with Ongoing Royalties

Most people think of NFTs as simple wallet-to-wallet transfers. But secondary sales of NFTs with ongoing royalties — where the original creator receives a percentage of every resale — introduce verification and payment complexity that direct transfers can't handle.

The royalty problem in private NFT sales#

• Direct wallet transfers bypass royalty-enforcing marketplaces.
• Seller may agree to pay the royalty manually but never does.
• Buyer receives the NFT but the creator's royalty is unpaid, creating ethical and sometimes legal exposure.
• Fake or 'look-alike' NFTs are traded as genuine pieces.

How escrow handles royalty NFTs#

• Escrow verifies the exact contract address and token ID on-chain before the deal is funded.
• Royalty percentage is calculated and escrowed alongside the sale price.
• On transfer, the royalty is sent to the creator's wallet automatically; the remainder releases to the seller.
• Buyer confirms receipt of the correct token before the deal closes.

Verification checklist for NFT escrow#

Always verify the contract address on a blockchain explorer (Etherscan, Solscan). Cross-reference the collection's official social channels. Check that the token ID matches the artwork or metadata the buyer expects. For high-value pieces, consider requesting a certificate of authenticity or provenance documentation from the seller.

Escrows Click holds funds in a neutral wallet, verifies delivery, and only releases payment when both parties are satisfied. Start a deal in two minutes at escrows.click.