OpenSea plans for NFT creator royalties faces backlash, volume is low

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The largest NFT mar­ket­placeOpenSea, 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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