OpenSea, the leading nonfungible token (NFT) marketplace, has announced new optional creator royalties.
It has been reported that as the biggest NFT marketplace by some margin, how OpenSea operates impacts the wider NFT space. In recent months, OpenSea has remained quiet about the topic but has now finally spoken out.
However, OpenSea is launching a tool for on-chain enforcement of creator fees (royalties) for new NFT collections, which has been started today (November 8), alongside other changes. The month-long ‘test’ will determine whether OpenSea cut creator royalties for existing collections in the long term and whether they move to an optional royalties system.
The report said that royalties are the fees that NFT artists earn every time their work changes hands. This means that creators are paid for their art, even on secondary sales. For artists, this is hugely important and gives them more financial freedom to create and produce great art.
Likewise, creator royalties have been an industry standard across the web3 space almost since the beginning, including on OpenSea. Many believe this is an essential feature of web3 and rewards those who create art, not art collectors. In recent months, various marketplaces have begun to reconsider the model and look at alternative ways to operate. LooksRare, the Ethereum NFT marketplace, and Magic Eden, a Solana NFT marketplace, have changed to an ‘optional royalties’ model.
Amber Vittoria, the NFT artist and influencer, said:
“Society often values art more than the artist. Web3 was the glimmer of hope that society could also value the artist (while we are alive) as well. Disappointed to see that hope dim by the day.”
Today, OpenSea is testing an ‘on-chain enforcement tool.’ This is a simple code snippet that creators can add to future NFT contracts and existing upgradeable contracts. It also restricts NFT sales to NFT marketplaces that enforce creator royalties. OpenSea will not enforce creator royalties for new collections that don’t opt-in to use the on-chain enforcement tool. OpenSea also stated that they won’t change existing NFT collections until “at least December 8th.”
Devin Finzer, the CEO of OpenSea, said:
“It’s become clear that the current mechanics of creator fee enforcement are not sustainable—not for the marketplaces who enforce them, and, more importantly, not for creators themselves.”
Thus, in the long and detailed thread, OpenSea also spoke about what will happen after the self-imposed date of December 8. They said that for transparency, all options are on the table for the future of creator fees. Optional creator fees on OpenSea are one of the options that they will explore.
Source: NFT Evening