Once again, the Twitter feed of the largest NFT marketplace OpenSea is shaking the realm. Thus, on November 6th, the platform's post on social media concerning the new optional creator royalties became the subject of a massive debate in the community, and a signal of the upcoming major changes in the entire NFT ecosystem.
OpenSea's tweet reads: "There’s been a lot of discussion over the past few months about business models for NFT creators & whether creator fees (“royalties”) are viable. Given our role in the ecosystem, we want to take a thoughtful, principled approach to this topic & to lead w/ solutions."
For a few months, OpenSea was keeping aside from the overwhelming zero-royalty campaign supported by other major NFT marketplaces like Magic Eden and LooksRare. But currently, the platform informed its users on launching a tool for on-chain enforcement of creator fees (royalties) for new NFT collections, starting from November 8th, alongside some other innovations. But according to OpenSea, the cut of royalties is now more of a temporary decision concerning new collections. The one-month test, which will be running through mid-December, will show whether OpenSea declines royalties for the existing NFTs and whether this decision will become a permanent one in support of an optional royalty system.
In addition to a long Twitter thread, the NFT marketplace published an article in its blog titled 'On Creator Fees', where OpenSea CEO Devin Finze speaks about testing an on-chain enforcement tool, calling it a "simple code snippet." This is a piece of code that creators can add to future NFT contracts and already existing upgradeable contracts. The snippet will also restrict viewing and trading NFT collections of those marketplaces that enforce creator royalties.
“In our opinion, by far the better option is for existing creators to explore new forms of monetization and alternative ways of incentivizing buyers and sellers to pay creator fees, and to ensure that future collections enforce creator fees on-chain,” Finze added.
Further, in the long and detailed thread, OpenSea CEO also said that the transparent exploration of the optional creator fees will be the next move starting from December 8th.
As it was with other marketplaces that had adopted a zero-royalty model, the news rolled out by OpenSea caused a wave of discussions from major NFT creators. One of the most active foes of the new upgrade was Deadfellaz founder Betty, who wrote: “Will you be reducing your own fees to OpenSea? Perhaps you [ed. OpenSea] could also explore new forms of monetization and alternative ways of incentivizing buyers and sellers.”
According to Betty and other creators and collection founders, NFT royalties support artists and allow them to keep working. Without an alternative route of empowering creators instead of limiting them, the marketplace and the community as a whole can face a sharp decline in new collections. Once creators feel undervalued, they may seek other ways of monetization, leaving OpenSea in favor of those marketplaces that still support a creator fee model.
For now, it's too early to speak about the conclusions OpenSea will make. We hope the final decision will solve the issue in favor of both NFT creators and collectors.