OpenSea, a nonfungible (NFT) marketplace, appears to have weighed in on the issue about NFT royalties by introducing a new “on-chain” tool to assist producers in enforcing royalties.
While other players in the market have been implementing their own tactics over the past few months, the NFT marketplace has remained largely silent on the subject of royalties and enforcement.
OpenSea CEO Devin Finzer wrote in a blog post on November 6 that they’ve “watched the voluntary creator fee payment rate dwindle to less than 20%” when creator fees are “simply not paid at all” in other marketplaces.
The CEO of OpenSea announced the debut of a new tool in the marketplace that will enable creators to offer “on-chain enforcement” of their royalties.
There’s been a lot of discussion over the past few months about business models for NFT creators & whether creator fees (“royalties”) are viable.
Given our role in the ecosystem, we want to take a thoughtful, principled approach to this topic & to lead w/ solutions. 🧵
— OpenSea (@opensea) November 6, 2022
The solution, which Finzer termed a “simple code snippet,” enables developers to impose royalties on existing upgradeable smart contracts as well as new and upcoming NFT collection smart contracts. Additionally, the code will limit the sale of NFT to only those marketplaces that impose creator fees.
It is undeniable that a large number of creators desire the opportunity to impose fees on-chain, said Finzer. “Fundamentally, we believe that the choice should be theirs to make — it shouldn’t be a decision made for them by marketplaces.”
Finzer added that while OpenSea will use an on-chain enforcement tool to impose royalties for new collections, it won’t do so for new collections that don’t opt-in.
OpenSea is not forcing people to utilise this specific solution. Instead, creators are free to use “whatever solution (they) choose and execute it anyway,” he added.
Due to implementation difficulties, the tool won’t be made available for use with current NFT collections just yet.
This news was met with mixed reception from the Twitter community and NFT creator. The Sappy Seals NFT collection founder, Wab.eth, told their followers that they ultimately appreciate this move despite not fundamentally supporting the removal of royalties.
