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OpenSea Launches First Royalty Enforcement Tool Amid NFT Marketplace Drama
The on-chain tool will blacklist collections from being resold on marketplaces that don’t enforce royalties and will only apply to new collections listed on the platform.
By Eli Tan
Updated Nov 7, 2022, 7:21 p.m. Published Nov 7, 2022, 6:44 p.m.
Non-fungible token (NFT) marketplace OpenSea joined the ongoing NFT royalty debate this weekend with a blog post announcing its first royalty enforcement tool.
The goal of the tool is to make creator fees, also known as royalties, enforceable on-chain, and will apply to new collections listed on the platform starting Nov. 8.
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Any collection created using the tool will be blacklisted from being resold on marketplaces that don’t enforce royalties like X2Y2 and Blur, which have considerably trimmed OpenSea’s market share to 50%, down from as high as 95%.
Read more: Retract Royalties, Reduce Revenue: NFT Creators Are Suffering and so Are Marketplaces
“Make no mistake, technical decisions like this involve trade-offs: enforcing creator fees on-chain requires sacrificing some of the censorship-resistance and permissionless nature of NFTs,” the company said in the blog post.
OpenSea is also working on royalty enforcement tools for existing collections, according to the blog post, though it won’t make any changes to the code of existing collections until at least Dec. 8.
The announcement was received well by the NFT-sphere as a creator-friendly alternative to ditching royalties altogether, unlike Magic Eden’s move to a royalty-optional model in October.
The NFT industry has seen more losers of the royalty debate than winners since the trend to move away from royalties began in August. Solana-based NFT project Y00ts created some controversy this past weekend by quietly re-adding a 3.33% creator fee to its collection on Magic Eden after being the first major project to set all royalties to 0% just a few weeks prior.
Read More: Why NFT Artists Shouldn't Expect 'Royalties'
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