Solana’s top NFT marketplace, Magic Eden, is the latest platform to switch to a no- figure model, following in the controversial trend set by X2Y2 and others.
Magic Eden, the most popular business for Solana NFTs, announced on the 14th of October, that it would no longer honor creator-set royalties on NFTs sold through its platform, bowing to recent pressure as royalties-shunning rivals are taking the spotlight.
Magic Eden Keeping Up with the Competition
Magic Eden had been the most dominant NFT business on Solana over the past year, generally retaining 90% or more of market share at any given time. The platform used that momentum to rise to a$1.6 billion valuation in June, just nine months after launching the platform, as it raised$ 130 million in Series B backing.
However, upstart marketplaces that opted not to require sellers to pay creator royalties on secondary sales—such as Hadeswap and Solanart—began cutting into Magic Eden’s dominance in recent weeks, prompting action from the platform. The move follows a controversial trend set by other popular NFT marketplaces like X2Y2, which have opted to make royalty payments optional in a bid to attract more users — to the chagrin of most creators.
Last week, Magic Eden said that it had partnered with Coral Cube, another marketplace and aggregator, to enable Solana NFT deals with optional royalties while still keeping full creator royalties in place on Magic Eden’s own marketplace.
The move follows a controversial trend set by other popular NFT commerce like X2Y2, which have decided to make kingliness payments voluntary in a shot to attract further druggies to the chagrin of utmost generators.
In addition, Magic Eden announced a hackathon to inspire Web3 builders to develop NFT technology and standards that can make creator-set royalties fully enforceable on-chain. Magic Eden will award up to $1 million in prize money, and Solana co-founder Anatoly Yakovenko is among the judges for the hackathon.
Magic Eden’s thread sparked immediate outrage on NFT Twitter. The company hosted a Twitter Spaces session 30 minutes after the announcement to answer questions from its druggies.
Momentum around skipping NFT royalties has grown in recent months, and recently came to head on Solana. As of Thursday afternoon, zero-royalty and royalties-optional marketplaces had significantly cut into Magic Eden’s recent market share, which stood at 58% over the previous 24 hours and 61% over the previous week based on total Solana NFT trading volume.
NFT traders already appear to be returning to the platform following its Friday announcement. According to data added up by NFT business Tiexo, Magic Eden is responsible for 86% of Solana NFT trading volume over the past 24 hours.
Magic Eden’s decision to not only make royalties optional but also temporarily cut its own marketplace fees has yielded an unintended result, however: it has led to a sudden rise in wash trading, wherein a user trades NFTs back and forth between controlled wallets at artificially inflated prices well above what the market dictates.