This past weekend, the dominant marketplace OpenSea released the first of a series of tools for its users, enabling developers of new non-fungible token (NFT) collections to impose royalties on-chain. Following a protracted discussion among market participants on the best strategy to enforcing payments to creators, the firm announced on November 8 that it intends to "take a serious, principled approach to this problem." The code it is granting creators access to only allows NFT sales on platforms that impose creator fees.
When a piece of work is sold, NFT artists receive royalties as payment. This implies that artists be compensated for their work, even when it is sold again. This is very significant for artists since it provides them greater financial freedom to develop and create more art.
The business stated on Twitter that "it's clear that many creators want the option to enforce fees on-chain and we believe that choice should be theirs-not a marketplace's-to make." Therefore, "we are developing technologies that we believe will balance the scales by giving creators more authority to choose their economic model."
The company will create additional tools with a similar function in the upcoming months and seek community input on the advancements.
In order to meet a deadline that it set for itself on December 8, OpenSea stated that it is still debating what to do with the NFT projects that are already in place. After that time, the market will decide, which may ultimately entail making traders' payment of royalty fees voluntary, as some other markets have done.
A variety of strategies are being thought upon by the business. These might include allowing creator fees to be voluntary or working together on various on-chain enforcement options for creators. Off-chain fees might also continue to be enforced for select subsets of collections. Some existing collections' smart contracts may already permit OpenSea's upgrade, which would impose royalties on-chain, but Finzer wrote in a blog post that changing other contracts would be more difficult.
Many new and competing marketplaces have tried to take market share recently by offering zero-royalty trade or making them optional. After Magic Eden made royalties optional for traders other Ethereum platforms like X2Y2, LooksRare, and Blur followed suit, nearly the entire Solana NFT market currently runs on such models.
