Animoca Introduces NFT Licenses Enforcing Creator Royalties – NFTgators

Quick take:

• The new licenses require royalty payments to receive licensing of an NFT’s art and tools.
• The licenses will be made available under creative commons.
• Animoca aims to create a legal framework to ensure that NFT royalties can be enforced.

Animoca Brands co-founder and CEO Yat Siu announced on Wednesday that the company will introduce a new set of licenses that require the payment of creator royalties as a condition of receiving licensing for an NFT’s art and utility.

According to Yat Siu, these licenses will enable creators to remove tools from any NFT protected by this framework that is performed royalty-free. The creators may also take legal action if third parties and marketplaces attempt or enable the circumvention of royalties required by the licenses.

Animoca will make the license agreement available under creative commons with the goal of creating a legal framework to ensure that NFT royalties can be enforced. This will then make a marketplace legally liable when every NFT sale with unpaid royalties will incur a liability that can then be legally enforced.

6/ There are clear disadvantages to denying royalty: it is bad for the industry, decentralization and against the ethos of Web3 + also unethical and without a clear legal framework, marketplaces remain able to sell without respecting creator royalty https://t .co/ IXRSGIeLQb

— Yat Siu (@ysiu) 9 November 2022

In an NFT royalty report published by Web3 media company PROOF, NFT collectors have paid creators over $1.5 billion in royalties over the past year. “Unlike incentive structures in traditional art, royalties enable NFT creators to grow financially with their projects. Bored Ape Yacht Club (BAYC) only earned 800 ETH of coin, but has generated 18,500 ETH in royalties,” it said in the report.

Zero royalty marketplaces have grown in popularity in recent months as projects like Karafuru, Zipcy and 3landers have generated more royalties than the value of their entire collections combined. NFT Worlds, once a large-cap project, has generated 5,200 ETH in royalties, but the project floor is only 0.6 ETH, leaving collectors at a loss.

In response, collectors have pushed for zero royalties, leading SudoSwap to launch a zero-royalty marketplace and x2y2 to follow suit. Since the rise of zero or optional royalties, 30-70 ETH is withheld from creators on marketplace trades on most days, according to the report.

Yat Siu believes that the choice to offer zero royalties should be left to creators rather than marketplaces and the NFT license agreement “retains the core principle of Web3, freedom of choice for the benefit of creators”.

He joins Yuga Labs and OpenSea in the ongoing debate over royalties for creators, as the leading marketplace launched a chain tool to impose NFT royalty fees on new collections following an outcry against the previously optional royalties.

Last week, Solana-based NFT marketplace Exchange.Art launched its very own “Royalties Protection Standard”. MOOAR, a profile picture (PFP), creator-centric NFT marketplace, ensures that creators are paid dues with a royalty policy of 0.5 -10% with 2% default when a collection is minted.

On November 9, also Rarible chimed inand says it honors royalties to creators as it seeks to draw more creators to the platform.

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