> For the complete documentation index, see [llms.txt](https://docs.collection.xyz/guides/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.collection.xyz/guides/technical-reference/royalties/how-are-royalties-implemented.md).

# How are royalties implemented?

The main on-chain implementation of royalties is ERC2981. ERC2981 is a standard that advises on a particular amount `royaltyAmount` and royalty receiver address `receiver` given a `tokenId` and overall `salePrice`. (<https://eips.ethereum.org/EIPS/eip-2981>) For example, to say that royalties are 1% would be to input `10000` in `salePrice` and get `100` as the `royaltyAmount`

Other royalties numbers can be off-chain by collection owners on third party websites such as Opensea or Looksrare, but can only be gotten periodically and thus done on a error-prone best effort basis.

The advisory nature of ERC2981 makes it an incomplete solution. As the most widely adopted royalty standard at the moment, we integrate with it in a nuanced way: We use the derived royalty percentage as an override, while in order to prevent pool creators from siphoning off royalties from NFT collections maliciously, we allow royaltyRecipient to be set as a fallback, a place to be sent if the `receiver` is not set to any value, as per ERC2981