OpenSea enables on-chain enforcement of new NFT creator fees
The year 2018 brought a new space for artists to flourish financially. Non-fungible tokens proved to be an effective way to reach out to anyone worldwide and sell a piece of digital art. However, it experienced a disadvantage in terms of creators’ fees or royalties.
OpenSea has addressed the issue by announcing the launch of a tool that enforces creator fees for new collections that have upgraded or upgradeable contracts. The tool will be published on 8 November 2022 at 12:00 PM ET. OpenSea further plans to roll out more enhancements and tools in the future so that the existing collections can learn the tool launch.
While some platforms have been known to pay creators what they should, many consider not including the option to pay royalties to the creator. If they do, the payout is limited to less than 20%, which is not enough for the hard work invested by the creators. Only new collections qualify for the update. Existing collections can expect the same to be implemented in the category starting December 8, 2022. The fee is yet to be determined, but creators can expect a wide range of inclusion.
The on-chain tool is a piece of code that creators must add to their NFT contracts. Existing NFT contracts can only add the snippets if they are based on the upgradeable contract. Unless there is rigidity in the creation, users are all good at continuing to implement the code snippet.
Enforcing the creator fee required creators to sacrifice censorship resistance and the permissionless nature of their NFTs. Creators will still be free to create according to their choice for the appropriate community. Buyers and sellers will also have the right to choose who they want to engage with on the platform.
Existing NFT collections with non-upgradable contracts can only include the snippet after undergoing a drastic change. For example, creators will need to move their canonical collection to a new smart contract. It may turn out to be a lot of work, but it will eventually yield better prices. Considering that monetization is the ultimate goal of any creator, a minor shift to a new contract turns out to be nonchalant.
The current mechanism of NFT marketplaces stands strong if a creator is looking for exposure. The recent launch of the tool by OpenSea considers that royalties matter and their enforcement is the need of the hour. With Web3 coming up in the middle of its wide use, creator fees will only become more relevant in the community. Truth be told, if a certain platform doesn’t enforce it, another platform will. A shift is then inevitable, not only for creators, but the entire NFT community.
