Web3 creators with higher-than-expected royalties losses: data

The NFT (nonfungible token) space has been a proven gateway to help users take their first steps into the Web3 space. This is especially true when it comes to artists and creators who use Web3 tools to enhance their work.

However, new data from eBit Labs and the LiveArt marketplace reveal that the loss of royalties for creators over the past year in the NFT space may be higher than estimated.

According to the data, after the emergence of the Blur marketplace in October 2022, two of the leading NFT collections – Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) – experienced shortfalls in royalties of around $20 million alone

The new data involving BAYC and MAYC shortfalls then points to previous estimates of $35 million in royalty shortfalls likely being too small.

Creating royalties has been a big topic of discussion in the NFT area. After suspending creator royalties and subsequently receiving severe community backlash, the OpenSea marketplace said it would enforce creator royalties on all listed collections.

Back in November 2022, the founders of BAYC proposed a new model for royalties for NFT creators, which would keep NFT transfers between wallets free.

Back in September 2022, MagicEden, another prominent NFT marketplace, defended its own NFT royalty enforcement tool. The tool gives creators the ability to flag an NFT or blur the image if the listing or trade circumvents royalty rules.

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Nevertheless, Boris Pevzner, co-founder and CEO of LiveArt, said that despite the Web3 ecosystem touting itself as a “creator-centric space,” the new data shows that the reality is not living up to that promise.

“The lack of royalties clearly indicates that the current system is not working properly.”

Pevzner went on to say that if NFT market wars repel artists from wanting to participate in the industry, “the space will lose its creative spirit and become more like the stock market.”

The market wars Pevzner refers to primarily refer to the entry of the Blur marketplace into the scene, which has targeted OpenSea’s market share.

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