The largest NFT marketplace, OpenSea, incorporated steps to help creators regarding fees and royalties while rival marketplaces cut creator fees or make them optional. Nonetheless, the reception was hostile.
OpenSea, in a Nov. 6 tweet, finally commented on the ongoing discussion regarding creator-set royalties or fees.
OpenSea: ‘For the creators, by the creators’ approach
The leading NFT marketplace took steps to adopt a ‘thoughtful, principled approach’ to enforce creator fee payments. The company, in a blog post, wrote:
“It’s clear that many creators want the ability to enforce fees on-chain; and fundamentally, we believe that the choice should be theirs to make – it shouldn’t be a decision made for them by marketplaces.”
To do so, OpenSea plans to implement a tool for on-chain enhancements of creators’ fees for new collections starting on Nov. 8. This would ‘balance the scales by putting more power in the creators’ hands.
Ergo, equipping them with more tools to control their business model.
OpenSea won’t make any changes to existing collections (yet). It will incorporate additional community feedback (to create a long-term policy) and roll out any changes sometime after Dec. 8.
But this won’t be an easy ride, as asserted by OpenSea’s co-founder and CEO Devin Finzer in the blog post. The month-long test will help the marketplace decide whether it will cut creator fees in the long term or move to an optional royalty system.
Are members happy?
The development above came at a time of utmost chaos. NFT marketplaces such as Solana’s Magic Eden in October switched to an ‘optional’ royalty model. In this plan, buyers and sellers could choose the percentage cut of the sale returned to the original artist.
Creators were quick to raise their concerns. For instance, one NFT artist called it a sad day for Solana, even asserting that the said update would “kill our project.”
Similar narratives were raised regarding OpenSea’s ambiguous steps. Nevertheless, Finzer shed some light on the need behind this.
He opined:
“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.”
OpenSea, once ruling the NFT market share, has seen its trading volume tumble to a significant low. As BeInCrypto reported last week, OpenSea’s trading volume declined by 94% since reaching an all-time high of $4.8 billion in January 2022.
Was the motive behind OpenSea’s creator fee to bolster its fading sales volume? Well, “Bobby Hundreds” Kim, co-founder of the fashion brand The Hundreds and the Adam Bomb Squad NFT project certainly thinks so:
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