TronWeekly

Crypto World News

You are here: Home / Archives for Royalties

Royalties

Yuga Labs’ Bold Move: Royalties Only Zone

by

NFT behemoth Yuga Labs announced that it plans to withdraw its support of those platforms that do not enforce creator royalties, claiming that “royalties are the lifeline that keeps creators building fun, weird, and innovative activations in the space. This meant Yuga Labs collections with royalty filters at the protocol level could only be traded on marketplaces. The newly launched Magic Eden Ethereum marketplace is slated to be the first major marketplace to partner with creators and will go live tomorrow.

According to the announcement post, the soon-to-be-launched platform will have tailored sections for collectors, loyalty rewards, and contractual loyalty enforcement. However, Yuga Labs’s most popular collections, like BAYC and CryptoPunks, are excluded, sparking reactions from the community. Some users questioned why royalties were not immutably baked into contracts in the first place.

Royalties were meant for ARTISTS, not mega corps trying to be like Disney. While I applaud MagicEden and their vampiring, I do not applaud yuga in any fashion being the spearhead of something that was meant for the little guy.

Magic Eden
Yuga Labs' Bold Move: Royalties Only Zone 2

For those new, NFT royalties are a pre-set percentage of the sale price given to the original creator of an NFT. They can be specified in the smart contract on the blockchain network or negotiated with buyers upon the initial sale. The concept has yielded mixed results.

Prominent NFT marketplace OpenSea deactivated its royalty feature Operator Filter last year. According to a blog post penned by the founder and CEO, Devin Finzer, the shift towards optional creator fees aims to incorporate the essence of choice and ownership, catering to the preferences of both creators and collectors.

Yuga Labs and Open Sea: Divergent Paths

Since its introduction in November 2022, the Operator Filter has been hailed as empowering creators with increased control over their web3 business models. However, the feature fell short of its goals, Finzer noted. Certain web3 marketplaces, such as Blur, Dew, and LooksRare, strategically circumvented the Operator Filter to evade enforcing creator fees on their platforms, he wrote.

Additionally, some creators found the Operator Filter restrictive, limiting their control over collections’ sales—which goes against the ideals of decentralized ownership. “So, we are giving collectors more flexibility and choice on creator fees,” Finzer stated.

OpenSea Shifts Gears: Controversial Royalty Feature Phases Out

by

One of the prominent NFT marketplaces globally, OpenSea, is poised to deactivate its Royalty feature Operator Filter by August 31, according to a blog post penned by the founder and CEO, Devin Finzer. This transition towards optional creator fees aims to align the platform with the essence of choice and ownership, catering to the preferences of both creators and collectors.

Since its inception in November 2022, the Operator Filter has been touted as empowering creators with increased control over their web3 business models. However, this endeavor did not meet its goals, as Finzer noted. The CEO elaborated that certain web3 marketplaces such as Blur, Dew, and LooksRare strategically circumvented the Operator Filter to evade enforcing creator fees on their platforms.

Additionally, some creators found the Operator Filter constrictive, limiting their control over collections’ sale—which goes against the ideals of decentralized ownership. “So, we are giving collectors more flexibility and choice on creator fees,” Finzer wrote.

Furthermore, the platform aspires to enable creators to extend their reach beyond single-use cases or business models, introducing innovative possibilities. What can users anticipate?

Collections currently utilizing the OpenSea Operator Filter will remain active until August 31. Subsequently, creator fees will become optional. However, for collections employing the tool and pre-existing collections on non-Ethereum blockchains, the creator’s preferred fees will be enforced until February 29, 2024.

OpenSea made it clear that creator fees are not disappearing altogether but will cease to be imposed unilaterally. “To be clear, creator fees aren’t going away—merely the ineffective, unilateral enforcement of them,” clarified Finzer.

The realm of NFT [non-fungible token] creator royalties has recently stirred up significant debate, notably surrounding the popular NFT marketplace OpenSea. The focal point of this debate revolves around whether NFT creators should receive ongoing royalties each time their creations are resold on the secondary market.

OpenSea’s Royalty Tool Stirred Debates

Advocates for NFT creator royalties contend that it’s a fair and essential method to compensate artists and project initiators for the enduring value of their work, akin to how traditional artists are compensated. Critics, however, argue that OpenSea’s efforts to curate a “registry” of marketplaces that ostensibly bypass creator royalties have raised questions.

OpenSea earlier countered these claims by saying the feature instead aims to support creators, suggesting that by blocking or prohibiting these marketplaces, creators will benefit. Yet, skeptics contend that this move places creators in a dilemma, forcing them to choose between OpenSea and these alternative platforms.

Solana NFT Brand Creator Says 0% Royalties Would “Redefine” Rug Pull

by

A popular Solana-based NFT collection DeGod has recently announced a new update to implement a royalty-free policy. Calling it a “new experiment”, the platform also added that the scheme would be extended to its other projects such as y00ts and t00bs.

Without divulging much, the team decided to reduce the royalties fee to 0% from what was previously 9.99%.

DeGods, which was introduced in October 2021, is a collection of 10,000 Solana NFTs. DeGods and DeadGods NFT holders can stake their NFTs in exchange for DUST utility tokens.

image 16
Solana NFT Brand Creator Says 0% Royalties Would "Redefine" Rug Pull 4

In response to prior claims that DeGods was a “rug pull” or a scam, Frank, the project’s pseudonymous founder, stated that “If royalties go away… the space will be more open to redefining what “rug” means.”

While some welcomed the move, others were critical and called out Frank for pivoting from his earlier statements.

There has been a long-standing debate in Crypto Twitter over royalty payments to NFT creators in the secondary market trades.

The problem got worse when SudoAMM, an Ethereum NFT marketplace from Sudoswap that disregards artist royalties on sales, was introduced and started to gain popularity.

To put it another way, one can sell an NFT on the market without having to pay the additional 5%, 10%, or other amount set aside as a creator royalty.

Solana NFT Marketplaces Too Sided With The Collectors/Buyers

Yawww, a Solana NFT marketplace, sparked a similar discussion. as well as another Solana NFT marketplace, Solanart, which too unveiled a new model in which sellers can select whether or not to pay creators a royalty fee and how much they want to pay.

Some supporters of the royalties think it will limit the capacity of creators to succeed in the Web3 environment.

Among them was Frank who surprisingly stood up in support of creator royalties and similarly forewarned of possible changes that might occur if royalties are disregarded, including more projects that break their promises [or “rug pull” buyers] because there is no ongoing compensation from secondary trades.

Amidst the barrage of angry tweets, Frank found support from DeGod fans, who commented the following,

“They are just frontrunning the market,” wrote @punk828_. “Everyone is already looking for zero royalties. This just forces teams to build outside revenue streams and actual businesses and not just be a jpeg project with no real-world use case.”