Major NFT Marketplace X2Y2 Changes Royalty Policy, Here’s Why It Matters

Here’s why the X2Y2 team’s solution to set 0% royalties could be critical to the progress of “serious” non-fungible tokens (NFTs).

Large NFT marketplace removes royalties

Yesterday, August 27, 2022, many Web3 and NFT enthusiasts tweeted about the controversial decision of the X2Y2 team to change royalties for creators.

Hot take on @the_x2y2‘s royalty is changing – that’s GREAT for the NFT space.

Slow-rug projects are altcoins with images and do not deserve royalties

Real NFT projects will be forced to become real, profitable businesses. Raising VC$ is one way to put pressure on this.

— Snowflake ❄️ (@jameskwho) 26 August 2022

With the new update, creators will not receive royalties when their artwork is sold. On the one hand, this measure will dramatically reduce the income of NFT artists and most likely make them think about leaving X2Y2.

However, some speakers are confident that removing royalties will lead artists to seek VC funding instead of retail-focused revenue models. This in turn will turn tokenized art into “real, profitable business”.

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An anonymous Azuki developer Cygaar also proposed a tool designed to allow NFT creators to whitelist marketplaces where the buyers of their tokens can offer them.

The X2Y2 team responds: “0% royalties is not the way forward”

With this tool, teams can prevent their NFTs from being listed on zero-royalty platforms.

Amid the criticism, the X2Y2 team released a statement to confirm that their royalty policy is still under development. The final decision will be up to the token holders, the X2Y2 representatives shared.

While the debate rages, please note that this is far from the finished product, and updates are already in the works:

1. We enforce royalties for 1/1 art and the like
2. Implement “holders only” voting system that allows holders to decide, as a group, whether to enable/disable optional royalties

— X2Y2 (@the_x2y2) 27 August 2022

They added that removing royalties is not the path to the perfect economic model for an NFT marketplace:

0% royalties is definitely NOT the way forward! We agree! We will work with market participants from all sides to ensure that does not become the norm, as it is up to us, collectively as an industry, to set the right standards and pave the way for the future of the NFT space

X2Y2 is the largest new generation marketplace for NFTs among all services launched after the 2021 NFT craze.