In short
- NFT marketplace OpenSea announced this afternoon that it will continue to enforce royalty fees for creators going forward.
- The platform said on Saturday it would consider making them optional for traders after rival marketplaces rejected them.
OpenSea, the biggest NFT marketplace by trading volume, announced today that it will continue to enforce creator royalties on NFTs following significant community backlash.
“We will continue to enforce creator fees on all existing collections,” the firm wrote in a tweet thread. “We’re blown away by the passion we’ve seen from both creators and collectors this week. We were looking for your feedback and we heard it, loud and clear.”
On Saturday, OpenSea said it was reconsiders its policy to enforce creator royalty fees on NFTs, follows a wave of competing marketplaces which had either rejected such fees or made them optional for traders to pay. A royalty fee is set by the NFT artist or creator and usually falls between 5% and 10% of the secondary sale price.
OpenSea set a self-imposed deadline of December 8 to take community feedback and consider possible courses of action, which it said included making creation fees optional for traders, only enforcing them on certain types of NFT pools, or implementing new enforcement methods.
The potential for the market’s largest NFT platform to stop enforcing royalties did not sit well with many prominent creators – including Creator of Bored Ape Yacht Club, Yuga Labs-who vocally pushed back against OpenSea and began to organize among themselves.
On Tuesday, well-known streetwear brand The Hundreds stepped up its response, announcing that it had canceled a planned OpenSea NFT release this week. “May it be a reminder to them, to you and the world that the artists are always in control,” wrote the company’s founders.
As the tweet suggests, OpenSea got the message “loud and clear” from the community. The $13.3 billion Web3 startup explained that it was “seeking guidance from our community,” but pointed to data showing that the share of royalty fees for the entire market has been falling in recent weeks as royalty-rejecting marketplaces have gained momentum.
“Unless something changes soon, this space is trending toward significantly fewer fees paid to creators,” OpenSea wrote. “No policy we implement will reverse this trend if this behavior continues.”
OpenSea encouraged creators to create additional incentives for traders to honor royalties and point them to marketplaces that honor them. It also pointed to implementing additional enforcement methods.
OpenSea reported on Saturday a system for enforcement of royalties for newly created NFT projects that are built around a blacklist that blocks listed marketplaces from handling these transactions. The method targets marketplaces that do not fully enforce royalty fees, which are among OpenSea’s biggest rivals – a move that some have called anti-competitive.
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