OpenSea, one of the leaders in NFT marketplaces, has stunned the space with a new announcement. So, from August 31, there are a number of changes coming for NFT authors in terms of royalties.
We launched our Operator Filter so creators could restrict secondary sales to web3 marketplaces that enforce creator fees.
But we relied on opt-in by the entire ecosystem, which didn't happen. So we’re making a few changes to our approach to creator fees. 🧵⬇️
— OpenSea (@opensea) August 17, 2023
And here are the details of what changes are expected in the near future:
- The operator filter is disabled, which allowed creators to limit secondary sales on those marketplaces that charged fees from authors. But those collections that used this filter, the previous royalties to authors will remain until February 29th. After that, fees will become optional for everyone.
- Non-mandatory royalties are introduced on all secondary sales of new collections from August 31st. In essence, this will be a tip format, an optional percentage of the sale that sellers in the secondary market can choose for the author. In this case, the seller has the full right to completely refuse to pay royalties.
The reaction of the NFT market to the abolition of royalties by OpenSea
A wave of criticism hit the OpenSea marketplace after this statement. Most of the collection creators and authors opposed such a decision, which is expected. Many authors see this as a global decline in their own income, most of which was royalties.
One of the main NFT influencers DCinvestor focuses on the cultural assessment of the community, because, in fact, this is where the problem lies.
the NFT royalty problem is not technological, it is cultural
most participants want to flip for a near-term profit and don't want to pay a "tax" to do that
whereas long-term collectors have an incentive to pay to create a virtuous cycle, continually attracting the best creators
— DCinvestor (@iamDCinvestor) August 18, 2023
And the richest NFT artist, Beeple, raised a serious discussion on this subject, causing controversy and debate among many market participants:
i think the creator royalty argument is actually a lot simpler than people make it out to be.
There is ZERO way to FORCE royalties technologically so creators will have to build a collector base that WANT to honor these royalties…. It’s really that simple. 🤷
— beeple (@beeple) August 13, 2022
The decision by OpenSea comes in response to the downturn in the NFT market and the race between marketplaces to lower fees to attract merchants. Blur‘s main competitor also contributed to this strategy. Recall that in February 2023, Blur overtook OpenSea in terms of trading volume on the Ethereum blockchain. An aggressive approach to the market and non-binding royalties helped him achieve such fast indicators.