Magic Eden opens up about its controversial NFT tool

The debate is heating up about royalties for creators in the NFT space. Originally started as a response to platforms like sudoswap, X2Y2 and Yawww emerging as royalty opponents from cookie-cutter creators, the conversation has continued to expand chains, prompting Solana NFT market giant Magic Eden to chime in.

In support of creators taking control of their secondary sales allowances, Magic Eden has introduced something called MetaShield to their platform. With MetaShield, launched in partnership with NFT marketplace and aggregator Coral Cube, NFT creators now have the ability to review listings and sales of NFTs, allowing them to act if collectors are circumventing royalties.

Although Magic Eden made its intentions to support creators clear, concerns about the viability of centralized intermediaries to facilitate the enforcement of royalties led to 12 September launch of MetaShield, which received mixed reviews. But not in the way we might have thought, as it seems both pro and anti creator royalties have joined the conversation surrounding Magic Eden’s latest update.

So what’s the big deal about MetaShield? Why are both camps divided even more over the idea of ​​creators being incentivized to protect their NFTs? Let’s explore.

First, let’s talk about MetaShield and what Magic Eden’s new features actually do.

MetaShield presents NFT creators with a new way to protect their NFTs from being sold through methods (or via platforms) that do not respect royalties. As previously mentioned, the new feature is a collaboration with Coral Cube, meaning that Magic Eden users will use Coral Cube’s Inspector to initially access MetaShield.

Through MetaShield, users can review and sort listings and trades of NFTs, which are implemented with custom royalties. Using Magic Eden’s new features, creators can exclude their NFTs from being listed on specific marketplaces (such as those that allow trading without honoring royalties), and even make reversible changes, such as watermarking or blurring an NFT’s image or video, and associated metadata.

2/ Based on the feedback, most people believe that hard-working creators deserve to be rewarded and paid.

The truth is that some of the hardest working creators today are the ones being punished. They are the most traded collections on zero royalty marketplaces. pic.twitter.com/SEF5EmE9jD

— Magic Ethen 🪄 (@MagicEden) 13 September 2022

How will this benefit users directly? First and foremost, MetaShield is not enforceable by anyone other than the creator. In response to nft now’s questions about the new features, a Magic Eden spokesperson said: “It is not our role to define or increase ownership of people’s NFTs. It is ultimately the creator’s choice to deploy MetaShield to protect their businesses We feel strongly that creators should have the right to hold sellers accountable for the terms of their NFTs and have created MetaShield to strengthen this.”

In addition to editing or shielding an NFT by editing its metadata, creators can use MetaShield to calculate the total debt of royalty share bypassers. Debt is calculated by reviewing the gap between royalties paid (or not) versus the royalty amount embedded in the NFT’s metadata by the creator.

By shielding an NFT and providing a liability calculation, creators can warn a potential buyer that they are not honoring royalties. And possibly one of the most prominent secondary benefits of these royalty debts being publicly available to all is that they can also be settled by anyone – not just the person holding a shielded NFT – which leaves room for goodwill to be paid forward.

Still, while shielding and debt settlement are undoubtedly powerful NFT tools, they essentially give creators the power to hold an NFT ransom, blurring the content until bad actors, who managed to circumvent royalties, pay up. This is why both parts User support and resistance have been fast since MetaShield’s launch.

Why is MetaShield a big deal?

Magic Eden’s MetaShield is just a single battle in creator royal wars. Although the majority of NFT enthusiasts seem to be in favor of royalties for creators, there are those – both at the collector and developer level – who believe that collectors should be given the choice of whether to pay a tertiary amount back to creators. On top of the often high selling prices and transaction fees they already face while shopping.

Despite advances in royalties, the debate always comes back to who should have the power to create and enforce them. This is precisely why collectors and creators continue to butt heads, forcing platforms to choose sides.

Although marketplaces like Yawww has been praised for allowing collectors to dictate their own fees, Magic Eden believes that marketplaces with custom royalty fees are in opposition to creators, with a spokesperson from the platform saying that these types of marketplaces can do significant damage to NFT creators’ businesses.

“We felt it was important that there be a tool to mitigate such harm,” said the spokesperson, who went on to note that as a collector- and creator-focused marketplace, Magic Eden often develops marketplace tools based on the unique and sometimes competing needs of their users. “In this case, the collectors’ need for financial NFT trades contrasts with the creator’s need to receive critical royalty payments,” the spokesperson continued.

Regardless of perspective, it cannot be ignored that artists continue to benefit greatly from royalties. Before XCOPY saw any significant primary sales, collectors trading his pieces peer-to-peer helped his catalog gain value. Royalties he received through these secondary sales likely helped sustain his career as he continued to create new art.

And while MetaShield doesn’t completely correct the outdated model of marketplaces acting as royalty brokers, it does allow NFT creators some agency in the royalty process. But many collectors feel that Magic Eden allowing creators to control their NFTs is not just a play increase its market sharebut a move that could end up being one threat to decentralization in the NFT room.

Is Magic Eden’s MetaShield the end-all-be-all when it comes to the royalty debate? Of course not; even Magic Eden have acknowledged this. But if a solution will be reached between collectors who want to dictate their own fees and creators who want to be paid for secondary sales, platforms will have to step up to the plate and strike with both camps in mind.