OpenSea Introduce Optional Creator Royalties
In a Twitter thread this morning, OpenSea, the leading NFT marketplace, announced new optional creator royalties. As the biggest NFT marketplace by some margin, how OpenSea operates impacts the wider NFT space. The detailed Twitter thread has opened up a massive debate in the NFT community and signals a major change in the web3 NFT ecosystem. In recent months, OpenSea has remained quiet about the topic but has now finally spoken out.
The OpenSea platform has told users that they are launching a tool for on-chain enforcement of creator fees (royalties) for new NFT collections, starting Tuesday, November 8th, alongside other changes. The month-long ‘test’ will determine whether OpenSea cut creator royalties for existing collections in the long term and whether they move to an optional royalties system.
Creator royalties support NFT artists
Royalties are the fees that NFT artists earn every time their work changes hands. This means that creators are paid for their art, even on secondary sales. For artists, this is hugely important and gives them more financial freedom to create and produce great art.
Creator Royalties has been an industry standard across the web3 space almost since the beginning, including on OpenSea. Many believe this is an essential feature of web3 and rewards those who create art, not art collectors.
In recent months, various marketplaces have begun to reconsider the model and look at alternative ways to operate. LooksRare, the Ethereum NFT marketplace, and Magic Eden, a Solana NFT marketplace, have changed to an ‘optional royalties’ model.
Many artists in the NFT space are furious about the move. NFT artist and influence Amber Vittoria tweeted earlier today about the situation. She said, “Society often values art more than the artist. Web3 was the glimmer of hope that society could also value the artist (while we are alive) as well. Disappointed to see that hope dim by the day.”
How will OpenSea optional creator royalties work?
On Tuesday, November 8th, OpenSea is testing an ‘on-chain enforcement tool.’ This is a simple code snippet that creators can add to future NFT contracts and existing upgradeable contracts. It also restricts NFT sales to NFT marketplaces that enforce creator royalties.
Furthermore, OpenSea will not enforce creator royalties for new collections that don’t opt-in to use the on-chain enforcement tool. OpenSea also stated that they won’t change existing NFT collections until “at least December 8th.”
In a blog post describing why they have made this decision, OpenSea CEO Devin Finzer said, “It’s become clear that the current mechanics of creator fee enforcement are not sustainable—not for the marketplaces who enforce them, and, more importantly, not for creators themselves.”
In the long and detailed thread, OpenSea also spoke about what will happen after the self-imposed date of December 8th. They said that for transparency, all options are on the table for the future of creator fees. Optional creator fees on OpenSea are one of the options that they will explore.
Some of the most famous artists in the NFT space are already speaking out against the new plans by OpenSea. Amber Vittoria, BobbyHundreds, Betty_NFT (creator of Deadfellaz), and others have all raised concerns on Twitter.
@betty_nft stated, “After speaking with @opensea, it feels like there is no plan, and no clear answers were given regarding existing collections & artist’s royalties. Communication has been misleading, and facts are not there. Speak up if you feel a certain way about this because it has an impact.”
OpenSea is the biggest NFT marketplace in the world, and how they move forward with creator royalties will significantly impact the web3 world. One thing is clear; they must take the time to listen to artists who create the NFTs sold on their marketplace.
Finally, without artists’ freedom to create art, the space will not exist. Moreover, the ‘community feedback’ that OpenSea states they are listening to is vital for the future relationship between creators and the marketplace.