OpenSea, a leading platform for trading non-fungible tokens (NFTs), has introduced support for the ERC-721C token standard, enabling creators to establish and enforce royalties effortlessly.
With a single click, creators on OpenSea can now ensure they receive earnings as per their preferences. This advancement stems from the invention of the ERC-721C token standard by blockchain gaming company Limit Break in May.
The introduction of ERC-721C addresses the issue of NFT wash trading by standardizing token transfer conditions, including royalties, across various platforms. Previously, users could bypass creator royalty commissions on secondary markets like OpenSea by transferring NFTs through different channels that didn’t honor these requirements.
Impact on NFT Trading Dynamics
Limit Break highlighted the negative consequences of this practice, stating that it encouraged zero-fee, royalty-optional trading through airdrops, effectively transforming non-fungible tokens into proxies for fungible ones. Such behavior undermined the integrity of the NFT industry.
OpenSea developers emphasized that compatibility for ERC-721C became possible following the Dencun upgrade on the Ethereum network on March 13. Enforcing creator earnings through this standard ensures support exclusively on OpenSea and other platforms powered by LimitBreak’s Payment Processor.
OpenSea Ensuring Fairness and Flexibility
While creators can still manually list their digital artwork on other marketplaces, OpenSea will match the lowest royalties set by the creator elsewhere. This ensures fairness and flexibility in the NFT trading ecosystem.
OpenSea’s compatibility with Seaport 1.6 further enhances the platform’s capabilities by allowing NFTs to be sold under specific conditions, such as altering metadata in response to sales volume.
Typically ranging between 2.5% to 10% per sale, NFT royalties have become a significant source of income for creators. The top 10 NFT collections have collectively earned over $345 million in royalties since their inception, highlighting the lucrative nature of the market.
