Last Updated on November 5, 2023 by Bitfinsider
With a resolute dedication to respecting creator royalties on NFT purchases, multi-chain NFT marketplace Magic Eden revealed on Saturday that it will collaborate with Yuga Labs, the creators of Bored Ape Yacht Club, to build a new Ethereum platform by the end of the year.
Jack Lu, the CEO and co-founder of Magic Eden, stated, “We’re very happy to put our money where our mouth is.”
According to Lu, Magic Eden has redesigned the Ethereum marketplace and will employ new smart contracts—the code that drives decentralized applications, or dapps—with technological advancements that guarantee royalties are distributed during secondary market sales.
Although Lu did clarify that the standard ERC-721 Ethereum non-fungible token (NFT) standard will be used, technical specifics will be made public prior to the marketplace’s launch. Royalties will be imposed on NFTs that are minted with specific “properties of the marketplace contract.”
According to Lu, the modification won’t affect how merchants communicate with Magic Eden; for instance, it won’t require them to provide identification through know-your-customer (KYC) procedures.
A tiny sum deducted from the sale price of any subsequent NFT sales, determined by the artist or organization behind the project, is known as a creator royalty. Usually ranging from 2.5% to 10% of the sale price, these fees were initially accepted by marketplaces as a means of allowing authors to reap long-term benefits from their tokenized works.
However, as NFT sales started to decline in the second half of 2022, a few new markets started to use workarounds to allow traders to forego or pay a reduced amount of these creator costs. Then, in an effort to stay up, major players did the same. Notable marketplace OpenSea, which had earlier pledged to pay royalties, finally made the decision this past August to cease collecting them.
When OpenSea said in public that it had thought about doing away with royalties in late 2022, Yuga Labs took offense. This past August, after the decision was made, the company came out swinging once more. The company behind Boredom Ape announced that it will no longer be able to handle OpenSea marketplace contracts for new collections and contracts that may be upgraded for existing collections.
CEO of Yuga Labs Daniel Alegre said: “Obviously, what we saw happening in the overall ecosystem with secondary royalties was the genesis of this.” “As a company leading the NFT space, we felt compelled to defend content creators after OpenSea unceremoniously threw down the gauntlet.”
By stating that the companies have “made it unequivocal that respecting creator royalties is non-negotiable, a clear stance amidst a sea of other marketplaces who turn their backs on creative entrepreneurs,” the press release from Yuga Labs and Magic Eden announcing the news seems to take a subtle dig at OpenSea.
According to the statement, Yuga Labs will only work with markets that support these values going forward, guaranteeing that creators are treated fairly.
Alegre stated that Magic Eden has promised to fix any bugs or workarounds with this new technology solution. Magic Eden is also a member of a working group in OMA3 (the Open Metaverse Alliance of Web3) with Yuga Labs to strengthen royalty standards.
Additionally, there is no exclusivity agreement with Magic Eden in this. According to the companies, Yuga Labs expects that the contracts introduced through this collaboration will be widely embraced. Other marketplaces are free to choose to use them. Moreover, other NFT developers can use the contracts to mint their products and apply comparable safeguards.
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