Illustration by Alex Castro / The Vergenone
One of the big promises ofNFTswas that the artist who originally made them could get a cut every time their piece was resold. Unfortunately, thatâs not the case anymore.
OpenSea, the biggest NFT marketplace still fully enforcing royalty fees,said todaythat it plans to stop the mandatory collection of resale fees for artists. Starting March 2024, those fees will essentially be tips âan optional percentage of a sale price that sellers can choose to give the original artist. If the seller doesnât want to hand over any money, thatâll be their choice.
The NFT ecosystem has been on a race to the bottom when it comes to fees. As the market for NFTs collapsed, marketplaces have lowered their own trading fees and stopped enforcing royalty fees in order to attract sellers. Blur, which has overtaken OpenSea as the biggest NFT marketplace by trading volume, only enforces a 0.5 percent fee on most collections, whereas creators typically set their fees at 5 to 10 percent.
OpenSea will stop enforcing royalty fees on all new NFTs starting August 31st. The marketplace will continue enforcing the fees on certain existing collections until March 2024, at which point theyâll become optional on all sales.
Judging by the responses to OpenSeaâsX postabout the changes, many in the NFT community are not thrilled by this. Critics say it will hurt small artists and undermines creatorsâ ability to control their relationship with the people who buy their work.
OpenSeaâs changes are âfundamentally wrong and hurts the entire NFT space,â Wildcake, the founder of the Posers NFT collection, tellsThe Vergein a DM. Wildcake said the change is particularly disruptive to creators who built a business plan around enforced royalties, like the Posers team had with a blockchain game theyâve been developing. âOpenSea decided to turn off this last opportunity to earn profit. As a result, we have been working for five months for free.â
Others, including OpenSea, are trying to frame it as a necessarily, positive change as the marketplace evolves. OpenSea CEO Devin Finzer criticized the feesâ âineffective, unilateral enforcementâ and said that creators will find other ways to monetize their work.
âOur role in this ecosystem is to empower innovation beyond a single use case or business model,â he writes in the blog post announcing that OpenSea will no longer support the ecosystemâs primary business model.
https://www.theverge.com/2023/8/17/23836440/nft-creator-royalty-fees-are-dead-opensea-optional