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OpenSea launches royalty tool, but can't list on most markets! Beeple: OpenSea is on fire

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OpenSea launches royalty tool, but can

After the NFT trading platform X2Y2 introduced the concept of "optional royalties," other markets have followed suit. Users now have the option to choose to pay 100%, 50%, or 0% in royalties when purchasing NFTs, effectively reducing costs for buyers but potentially harming creators' interests. In an effort to address this issue, OpenSea has launched a tool for mandatory royalty collection to ensure creators' income sources, sparking significant controversy in the process.

OpenSea Introduces Mandatory Royalty Collection Tool

OpenSea stated in its latest article that due to multiple NFT markets implementing optional royalty systems, the percentage of royalties has decreased to below 20%. This has led to NFT creators being unable to earn revenue from secondary markets even if they have set royalties, thus reducing their willingness to create.

OpenSea believes that the decision of whether to pay royalties should not be determined by the marketplace but by the creators themselves. To address this issue, OpenSea has introduced an on-chain enforcement tool for collecting royalties. This tool is a simple code snippet that creators can add to future NFT contracts and existing upgradeable contracts.

Once added, these NFTs can only be traded in markets where royalty collection is enforced, essentially blacklisting them from other markets such as X2Y2, Looksrare, MagicEden, Blur, which offer optional royalty systems.

This mechanism will be officially implemented on 11/9, where any NFT project using this on-chain enforcement tool will have royalties collected, while those not using the tool will not be subject to royalties. Existing NFT projects will not have any modifications to their royalty systems until 12/8.

Why Did OpenSea Make This Decision

Undoubtedly, enforcing royalties on-chain sacrifices some of the censorship resistance and permissionlessness of NFTs. Nevertheless, OpenSea believes that creators should have the right to establish the collections and communities they desire, and buyers and sellers should continue to have the freedom to choose their involvement in NFT projects.

"It's clear that the current creator fee system is not sustainable in the long run, not for the markets implementing this mechanism, and most importantly, not for the creators themselves," OpenSea stated.

However, OpenSea also understands that this may not be the best approach, and creators need to explore new monetization methods and alternative ways for buyers and sellers to pay royalties to ensure that future creators can continue to earn revenue. OpenSea will continue to update and optimize this new feature.

beeple: OpenSea Is on Fire

Following the announcement of this feature, renowned NFT collector beeple posted an artwork on Twitter symbolizing OpenSea on fire, suggesting that OpenSea's actions will cause them significant harm.

After the implementation of this feature, artworks that do not use the royalty enforcement tool will not be able to collect royalties on OpenSea. However, if creators wish to collect royalties on OpenSea, they can only trade in a few markets that do not implement optional royalties.

In this scenario, creators will face a dilemma, potentially leading some to abandon OpenSea and seek refuge in other NFT markets.

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