New Marketplaces Make Royalties Optional
On November 6, OpenSea announced an on-chain tool to enforce the creator's fee (royalty). However, the decision went against the trend as more marketplaces such as Magic Eden and LooksRare made royalties optional.
"It's clear that many creators want the ability to enforce fees on-chain", OpenSea tweeted. "We believe that choice should be theirs–not a marketplace's–to make."
November 6: OpenSea announced its policy of enforcing royalties
On November 6th, OpenSea announced an on-chain tool to enforce royalties for new collections. It was deployed on November 8th at 12 p.m. The open source code is available on Github.
In the Twitter thread, the platform mentioned that they would not make any changes to the existing collection on at least December 8 due to the difficulty of adding code.
Backlash from Collectors & Creators
There was significant opposition from creators and collectors.
One of the reasons for the opposition was the platform blacklisted marketplaces that made royalties optional and completely blocked to prevent collections from being resold. Creators warned that this could lead to market monopolization and are very centralized, which goes against web3's philosophy.
Bobby Hundreds, a co-founder of The Hundreds, canceled his planned NFT collection drop at OpenSea, and commented, "We hope that this statement adds pressure to all of the marketplaces to uphold the Web3 ethos".
November 10: OpenSea Announces Enforcement of Royalties Despite Backlash
In response to the backlash, OpenSea reiterated its intention to enforce royalties and announced that they would enforce royalties on existing collections that were under consideration.
The platform explained that although it had been collecting royalties since its inception in 2018, it was vulnerable to collecting them off-chain and mentioned that royalty payment rates have dropped to less than 20% in marketplaces where royalties are optional.
Now The Optional Royalty is Becoming the Norm
The trend now is for royalties in NFT marketplaces to be optional. Solana-based marketplace Magic Eden introduced optional royalties in October, allowing buyers to choose them.
New NFT marketplaces X2XY, Sudoswap, and LooksRare, launched in February 2022, have no royalties or buyer choice.
Comments