OpenSea, the largest NFT marketplace by trading volume, announced today that it will continue to enforce creator royalties on NFTs following significant pushback from the community.
“We will continue to enforce creator fees on all existing collections,” the firm wrote in a tweet thread. “We’re awed by the passion we’ve seen from creators and collectors alike this week. We were looking for your feedback, and we heard it, loud and clear.”
OpenSea On NFT Policy
On Saturday, OpenSea said that it was reconsidering its policy towards enforcing creator royalty fees on NFTs. This was following a wave of rival marketplaces that had either rejected such fees or made them optional. Optional for traders to pay. A royalty fee is set by the NFT artist or creator. The fee typically falls between 5% and 10% of the secondary sale price.
OpenSea set a self-imposed December 8 deadline to take in community feedback and consider possible courses of action. One which it said included making creator fees optional for traders. This means that enforcing these fees will only be as regards to some types of NFT collections.
However, the potential for the market’s largest NFT platform to stop enforcing royalties did not sit well with many prominent creators. One of these creators include Bored-Ape-Yacht-Club creator, Yuga Labs who vocally pushed back against OpenSea and began organizing amongst themselves.
Furthermore, on Tuesday, noted streetwear brand The Hundreds stepped up its response by making an announcement. They announced that they had canceled a planned OpenSea NFT drop this week. “May it be a reminder to them, to you, and the world that the artists are always in control.” The above statement was given by the firm’s founders.
As its tweet suggests, OpenSea got the message “loud and clear” from the community. The $13.3 billion Web3 startup explained that it was “seeking guidance from our community,” however, that was not the case. The startups pointed to data showing that the share of market-wide creator royalty fees is tumbling. Especially in recent weeks as royalties-rejecting marketplaces gain steam.
“Unless something changes soon, this space is trending toward significantly fewer fees paid to creators,” OpenSea wrote. “No policy that we implement will reverse this trend if this behavior continues.”
OpenSea encouraged creators to create additional incentives for traders to honor royalties and point them towards marketplaces that honor them. It also pointed towards implementing additional enforcement methods.
Royalty Enforcement System
On Saturday, OpenSea announced a royalties enforcement system for newly-created NFT projects. One that is built around a blacklist that blocks listed marketplaces from handling those transactions. The method targets marketplaces that do not fully enforce royalty fees, which are among OpenSea’s biggest rivals.
Some of the NFT world’s most prominent creators are speaking out in defense of royalties this week. This started after OpenSea said it is considering changes to its enforcement including potentially making them optional for traders. Now one brand has taken things a step further by canceling an Ethereum NFT drop planned this week.
Finally, Bobby “Bobby Hundreds” Kim tweeted on Tuesday night. He said that his streetwear brand The Hundreds will not launch its Badam Bomb Squad on OpenSea this week. This is due to the company’s unclear communication around its creator royalties stance.
“We were waiting to see if OpenSea would take a stand to preserve creator royalties for existing collections. This is especially after they’d heard from the artists, founders, and NFT community.” The above statement was tweeted by the brand. “Unfortunately, that announcement has not arrived in time.”