OpenSea Sides With Creators in the Matter of NFT Royalties
Leading non-fungible tokens (NFTs) marketplace OpenSea has finally shared its stance on the matter of royalties, revealing that it wants to allow creators to enforce fees on-chain.
In a recent Twitter thread, the marketplace said the choice to enforce royalties should be the creators’, not the marketplace’s.
“There’s been a lot of discussion over the past few months about business models for NFT creators & whether creator fees (“royalties”) are viable. Given our role in the ecosystem, we want to take a thoughtful, principled approach to this topic & to lead w/ solutions,” OpenSea said.
The marketplace added that many creators want the ability to enforce fees on-chain and that they “believe that choice should be theirs–not a marketplace’s–to make.”
“So we’re building tools we hope will balance the scales by putting more power in creators’ hands to control their business model,” OpenSea added.
More specifically, OpenSea announced the rollout of a system that would let creators of new projects blacklist certain marketplaces that do not require traders to pay royalties. That system takes effect on November 8.
OpenSea said that it is still considering what to do about existing NFT projects and that it will garner additional community feedback ahead of a self-imposed December 8 deadline.
After that date, the marketplace will make a decision—which could ultimately include making royalty fee payments optional for traders, as some other marketplaces have done.
“In transparency, the consideration set for what happens after Dec 8 is wide open—[with] options ranging from continuing to enforce off-chain fees for some subsets of collections, to allowing optional creator fees, to collaborating on other on-chain enforcement options for creators,” the marketplace tweeted.
Controversial No-Royalty Trend Finds Momentum
As reported, Magic Eden, Solana’s top NFT marketplace, switched to an optional royalty mechanism in mid-October.
The move came after a controversial trend set by other popular NFT marketplaces like X2Y2, which have chosen to make royalty payments optional in a bid to attract more users, much to the chagrin of most creators.
In the announcement, Magic Eden shared a graph showing that the number of cumulative wallets using optional royalty marketplaces to buy or sell NFTs skyrocketed in late September. “The market has been shifting towards optional creator royalties for awhile,” the platform added.
“We hope that this decision is not permanent,” Magic Eden said in the announcement.
The company also said it is putting $1 million into a fund to create better royalty enforcement tools and hopes to experiment with “new models outside of royalties” in the future. A Magic Eden representative said that his hand was forced by 60% of NFT traders currently on royalty-optional platforms.
Instagram To Add Support For NFTs