- Non-fungible (NFT) marketplace OpenSea appears to have taken its place in the NFT royalty debate and has launched a new “on-chain” tool to help developers enforce royalty payments.
- The largest NFT marketplace is taking steps to help creators manage fees and royalties, while competing marketplaces are reducing creator fees or making them optional.
- The NFT community does not seem pleased with this.
According to CoinGecko, the NFT market accounts for 66% of the NFT market, but has been relatively silent on licensing fees and enforcement while others in the industry have implemented their own tactics in recent months.
In a blog post on November 6, OpenSea CEO Devin Finzer noted that in markets where fees are optional, “voluntary fee payment rates for creators drop to less than 20 percent,” while in other markets, creator fees “are not paid at all. The OpenSea CEO announced that the marketplace has launched a new tool to allow developers to run their royalties on-chain.
Finzer describes the tool as a “simple code snippet” that allows developers to enforce license fees on new and future collective NFT smart contracts and existing extensible smart contracts.
The code will also limit NFT sales to marketplaces that charge creator fees. Finzer also said that Open Sea will use on-chain enforcement tools to collect royalties on new collectibles. However, it will not do so for new collectibles that are unregistered. He explained in the accompanying Twitter Spaces that OpenSea doesn’t require people to use our specific solution. The tool is not currently being rolled out for existing NFT collections either due to implementation issues.
The Community Reacts
The above developments occurred during the most chaotic of times. In October, NFT marketplaces like Solana’s Magic Eden switched to an “optional” licensing model. In this program, buyers and sellers can choose a percentage of the sales cut that is returned to the original artist.
The creators were quick to voice their concerns. For example, one NFT artist called it a sad day for Solana, even claiming that the update would “kill our project.” Similar claims have been made about OpenSea’s ambiguous moves.
Trading volume for OpenSea, which once dominated NFT market share, has fallen to notable lows. As BeInCrypto reported last week, OpenSea’s trading volume is down 94% since hitting an all-time high of $4.8 billion in January 2022.