Ethereum NFT Marketplace X2Y2 Will Enforce Royalties After OpenSea’s ‘Brave Move’

Just a couple of weeks ago, it seemed that most people NFT the market was on a steep slide towards rejection of royalties to creators altogether. Even the best marketplace, OpenSea, considered making them optional. But pushback from the creator forced OpenSea to maintain royaltiesand now a rival Ethereum Marketplace similarly says it will enforce royalties.

X2Y2, which launched earlier this year and saw significant trading activity over the summer, announced today that it will impose royalties on all NFT pools – both existing and newly launched projects.

Previously, X2Y2 offered a flexible royalty model which allows both creators and collectors to have input into how strictly the marketplace enforced royalties for each project. However, only certain types of NFT projects – specifically artwork and access cards – could choose to have royalties fully enforced. Profile Picture (PFP) projects were not eligible for this option.

IN a Twitter thread todayX2Y2 praised OpenSea for finally taking a stand on royalties to creators, admitting that many recently launched projects used OpenSea’s blocklist code that prohibited these NFTs from being traded on marketplaces that do not fully enforce royalties.

“Belief aside, if there was anything self-evident in crypto, it’s ‘the code.'” Since [OpenSea] launched OperatorFilter two weeks ago, most of the new projects have sided, X2Y2 wrote. It added, “‘Code is law’ and we respect the law.”

X2Y2 wrote that it removed the Flexible Royalty setting for new projects using the OpenSea block code, but that it will also now enforce the royalties set for all existing NFT projects as well.

“When OpenSea risks market share and makes a bold move to defend royalties,” X2Y2 wrote, “they have our respect!”

An NFT is a blockchain token that represents ownership in an item. They are often used for digital goods such as artwork, PFPs, collectibles and video game items, and the NFT market increased to $25 billion in trade volume over 2021. An NFT royalty is a fee taken from a secondary market sale, typically between 5% and 10% of the sale price, and paid to the original creator.

Such royalties cannot be fully enforced on-chain with the current popular NFT standards across top chains such as Ethereum and Solana, but top marketplaces previously respected royalties for creators as something of a social construct. Many creators and collectors consider royalties a central part of Web3 ethos.

However, market momentum began to shift away from royalties this summer as new trading platforms such as SudoSwap and Yawww ignored them in an apparent attempt to wrest market share from the top marketplaces. At Solana, almost all trades are now done on platforms that do not respect or require royalties, follows Magic Eden’s shift last month.

Earlier this month, top Ethereum NFT marketplace OpenSea said it was considering moving away from enforced royaltiesalso, follow moves from marketplaces like X2Y2, Blur, and LooksRare to make them optional.

OpenSea quickly faced criticism and backlash from NFT creators, including Bored Ape Yacht Club producer Yuga Labsand streetwear brand The Hundreds canceled a planned NFT release in the marketplace. Last week OpenSea changed course and said that it will continue to enforce royalties for creators on all projects, new and old, including those using the blocklist product.