In highly controversial move, OpenSea lowers fees to 0% for “limited time”

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OpenSea, the lead­ing NFT mar­ket­place, announced in a Tweet on Feb. 17 that it would be adopt­ing a con­tro­ver­sial move to tem­porar­i­ly waive its mar­ket­place fee, ramp­ing up the bat­tle for mar­ket share with zero-fee plat­form Blur.

Main changes to OpenSea

  • A tem­po­rary 0% mar­ket­place fee, default on all col­lec­tions with­out on-chain roy­al­ty enforcement.
  • Option­al cre­ator roy­al­ties start­ing at 0.5%
  • A change to OpenSea’s oper­a­tor allow­ing for inter­op­er­a­ble mar­ket activ­i­ty between Blur, ulti­mate­ly allow­ing cre­ators to receive earn­ings on both platforms.

OpenSea cit­ed the cut-throat com­pe­ti­tion across the NFT space as a rea­son for its pol­i­cy reversal.

“There’s been a mas­sive shift in the NFT ecosys­tem,” it said on Twitter.

“In Octo­ber, we start­ed to see mean­ing­ful vol­ume and users move to NFT mar­ket­places that don’t ful­ly enforce cre­ator earn­ings. Today, that shift has accel­er­at­ed dra­mat­i­cal­ly despite our best efforts.”

OpenSea also announced they would revise its block­list of oth­er mar­ket­places that fail to hon­or full roy­al­ty pay­ments to cre­ators, now per­mit­ting sales on NFT mar­ket­places with sim­i­lar poli­cies, includ­ing Blur.

$BLUR style economics

The com­pe­ti­tion between OpenSea and Blur has inten­si­fied since Blur’s native token was launched on Tuesday.

BLUR is cur­rent­ly ranked by Coin­Mar­ket­Cap as #117 of all cryp­tos, with a 24-hour trad­ing vol­ume of $509 mil­lion; the coin is cur­rent­ly trad­ing at $0.0976 after launch­ing on Feb. 14 at $0.50.

(Source: CoinMarketCap)
(Source: Coin­Mar­ket­Cap)

Short­ly after the air­drop, the token reached $500 mil­lion in trad­ing volume.

The battle for NFT marketplace share heats up

On Feb. 15, Blur passed OpenSea in trad­ing vol­ume for the first time since its incep­tion in October.

Despite the day loss to Blur, OpeaSea’s week­ly vol­ume was much high­er. Accord­ing to recent data from Nansen, OpenSea’s week­ly vol­ume was 36,608 ETH. In com­par­i­son, Blur’s week­ly vol­ume was only 11,424 ETH. Between Feb. 7 and Feb. 14, OpenSea had an aver­age of 8.37 times more sales than Blur, and rough­ly eight times more wal­lets. How­ev­er, the gap between the two plat­forms decreased and was the small­est on Wednesday.

On that day, OpenSea had 19,908 total sales, which was only 1.63 times more than Blur’s 12,185 sales. A sim­i­lar trend can be observed with the num­ber of active wal­lets on each plat­form. The dif­fer­ence between the two is now only two-fold, demon­strat­ing that the com­pe­ti­tion between the two largest mar­ket­places is becom­ing increas­ing­ly intense.

The debate over NFT royalties

On Wednes­day, Blur pub­lished a blog post aimed at NFT cre­ators, out­lin­ing the dif­fer­ences in roy­al­ty pay­ment options between the two plat­forms and encour­ag­ing its users to block­list OpenSea so that cre­ators can receive full royalties.

The debate over cre­ator roy­al­ties has caused a rift between the two plat­forms, with OpenSea tak­ing a hard­line stance on the mat­ter by launch­ing a roy­al­ty enforce­ment tool in Novem­ber, a move they have since back­tracked on, despite wide­spread calls from artists who argue that roy­al­ties func­tion as their de fac­to pen­sions in the Web3 dig­i­tal economy.

In the­o­ry, roy­al­ties were once thought to be the holy grail for NFT advo­cates, tout­ed as one of the sig­nif­i­cant rea­sons artists should adopt blockchain tech­nol­o­gy. In prac­tice, this is under threat as a race to the bot­tom has seen many NFT plat­forms remove fees and royalties.

“Today, ~80% of total ecosys­tem vol­ume does not pay full cre­ator earn­ings, and the major­i­ty of the vol­ume (even account­ing for inor­gan­ic activ­i­ty) has moved to a zero-fee envi­ron­ment,” OpenSea admit­ted on Friday.

(Source: Dune)
(Source: Dune)

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