# How the royalty system works A royalty is a legally binding payment made to an individual or company for the ongoing use of their assets, intellectual or physical. Royalties are also paid to the owners of properties to compensate them when they license out their property to another party. Royalties can provide property owners with a share of revenues received for the use of that property when they license it out to another party. An example of royalties would be payments issued to musicians for playing their music on the radio, on television, in films and in public places. On the NFT market, artists also receive royalties when their works are sold or used. When you create a collectible NFT, you can set your own royalties for it. The NFT STARS platform offers artists three royalty options: 10%, 20% and 30%. If your NFT is re-sold by its original buyer, you will get a specified percentage of its resale price. For example, you create and sell your NFT for 1 ETH with 20% royalties. Next, your original buyer sells it for 2 ETH. The royalties you receive will therefore be 0.4 ETH. Each time your NFT is sold, you will receive 20% of the sale price in royalties. The royalties are paid through a smart contract. Here is a transaction example:
![](https://lh6.googleusercontent.com/STNxDffto_ymQmd-3KFdw2cOhH7rXlYrz83vaUi6Q-eBW_AWAaQf4SlV23nc2VtyebLLKQP0ti2109Q-PxCJAJyXzxWM2kperQQxEHSpMBJAFPHejAt5YVmFL2MiDBSZ-SelKkSl) The above payment happened in the following way: — 2% went to the address that is listed as a beneficiary on our platform — 10% went to the artist as royalties — the rest of the sum went to the NFT seller. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.nftstars.app/nft-stars/guides/how-does-the-royalty-system-work.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.