Magic Eden: Will this controversial move be a hit or a miss? Assessing…
Magic Eden, the biggest NFT marketplace on Solana [SOL], with a monthly trading volume of over $87 million, announced its decision to implement an optional royalties structure on its platform.
With this, buyers of NFTs on Magic Eden reserve the right to determine how much they wish to pay as royalties to the creators of these NFTs.
🧵After some difficult reflection and discussions with many creators, we’ve decided to move to optional royalties on @MagicEden.
Effective later today, we will also begin running a promotion to waive our platform fees.
— Magic Eden 🪄 (@MagicEden) October 15, 2022
Some hard-to-swallow pills
In a series of tweets published by Magic Eden, the NFT marketplace acknowledged the fact that the newly introduced royalty structure has “serious implications for the ecosystem.”
This was because royalty payments on NFT purchases were not unenforceable. Therefore, whether a creator will receive royalty payments or not is left to the whims and caprices of buyers that offer the same.
There has been an ongoing debate as to whether royalty payments for NFT purchases should be made compulsory or not. Magic Eden noted that in its findings, optional creator royalties had been the trend for a while. Hence, its decision to implement the same.
4/ The market has been shifting towards optional creator royalties for awhile. These charts shows the cumulative wallets that have used optional royalty marketplaces to buy or sell NFTs. pic.twitter.com/wxiU800l2P
— Magic Eden 🪄 (@MagicEden) October 15, 2022
As to how the new optional royalty structure will run, Magic Eden stated that by default, all NFT collections/listings on its marketplace would honor full royalties. However, “the decision on how much royalties to pay will be passed to the buyer.”
According to Magic Eden, the “rationale for shifting royalties payments to the buyer is to make sure the buyer has full understanding of whether they are going to receive the benefits that creators provide.”
NFT buyers on Magic Eden have three ways to set their desired royalty percentages for their purchases. Firstly, buyers can select a royalty percentage payment from their profiles that would be applied to all their NFT purchases.
Furthermore, buyers have the freedom to determine how they want to “honor the royalties of each NFT in the royalty section of the “Item Details” page.” Lastly, they can decide on which NFT from a particular collection they want to pay royalties on.
Magic Eden in a nutshell
According to data from Dune Analytics, so far this month, trading volume on Magic Eden has totaled $28.27 million. Although just a year old, daily trading volume on Magic Eden represented about 90% of all trades logged across all the NFT marketplaces on Solana.
Source: Dune Analytics
