Solana can get enforceable NFT royalties via new Metaplex standard

Creator royalties have largely fallen out of favor in Solana NFT place in the past, as top marketplace Magic Eden made paying them optional last week after royalty-shoving rivals hijacked market shares. Now Metaplexthe creator of Solana’s NFT standard, says it is developing a new standard that can enforce royalty payments across the board.

Metaplex announced the news on Thursday night, amid the ongoing debate surrounding royalties for creators, saying it is “building a new asset class that will enable creators to enforce royalties at the protocol level.”

While artists and creators can set royalty rates via project smart contracts– that is, the code that operates autonomously, decentralized apps– Marketplaces can circumvent these provisions and ultimately choose whether or not to respect them. By doing so, NFT traders avoid paying between 5% and 10% in fees for each sale. And while this has greatly upset project creators who rely on these fees for revenue, NFT royalties are currently unenforceable by today’s Solana standard.

The existing Metaplex standard is used by more than 99% of all Solana NFTs minted to date, the firm said. Metaplex said it can create enforceable royalties by expanding the token metadata program, which is how NFT creators add the data and information that creates NFTs — or blockchain tokens which represents ownership in an object – unique from each other.

Metaplex’s tweet thread suggests that it aims to support multiple NFT asset standards within the framework, offering creators options for future projects. Since the Metaplex technology is already widely supported by marketplaces and walletsmay be well suited to rolling out such changes that may affect the entire Solana creator community.

“We believe multiple asset classes and behaviors will coexist in the future – token metadata provides the interoperability and stability the ecosystem needs to move forward without fragmentation,” wrote Metaplex, describing it as an “iterative process” going forward.

CEO Stephen Hess tweeted that Metaplex sought to enforce protocol-level royalties and introduce additional asset classes in July when it proposed Digital Asset Standard framework, but that it could not find “critical mass” among builders at the time. “That has changed,” he wrote.

Metaplex also teased additional solutions for Web3 monetization for creators that will be revealed at the Solana Breakpoint conference in Lisbon next month. Royalties have been a key part of many NFT projects’ revenue streams in the past, although the uncertainty surrounding platforms honoring them has pushed creators and developers in the space to consider alternative methods.

Yawww was the first Solana marketplace to drop royalties earlier this summer in an apparent attempt to draw traders away from the dominant Magic Eden, and the trend caught on on other platforms as well. The recent launch of Hadeswap – a zero-royalty NFT trading platform built on liquidity pools – helped accelerate the decline in Magic Eden’s market share.

Magical Eden claimed last week that it would maintain royalties for creators on its platform, instead partnering with NFT aggregator and marketplace Coral Cube to enable royalty-optional trading through the platform. But last Friday, bowing to pressure from rivals, Magic Eden changed course and said it would also make paying royalties optional for the creator.

Separate from Metaplex, known pseudonymous NFT creator Sincere— the founder of popular Solana projects DeGods and y00ts—shared his own proposal to capture royalties for creators across the ecosystem.

Frank’s pitch similarly focuses on a new standard for the entire ecosystem. He envisions a standard that enforces royalties on trades, includes a blacklist for marketplaces and platforms that try to avoid them, and allows community members to vote on a fixed royalty rate across all projects. He also believes that existing projects should be able to migrate to the new standard.

“We can either accept royalties going to zero as ‘tragedy of the commons,’ or we can come together as a community to solve the problem,” Frank wrote. “This whole ecosystem is driven by social consensus. If we all decide we want royalties, there’s a way to make this happen. If we don’t, that’s fine too. The key is we everyone controls our destiny as an ecosystem.”