Magic Eden Introduces a Protocol to Protect Creator Royalties

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Last Updated on December 3, 2022 by Bitfinsider

Magic Eden, a marketplace for non-fungible tokens (NFTs), has modified its stance on creator royalties, announcing on Thursday that it is releasing a system that would impose royalties on any new collections that opt-in to utilizing the tool.

The Open Creator Protocol (OCP) is an open-source solution built on top of Solana’s SPL managed-token standard that will enable creators launching new collections the option to secure royalties. Beginning on December 2, Magic Eden will impose royalties on all collections that embrace the standard and allow artists to exclude markets who do not impose fees.

For creators who do not choose OCP for their NFTs, royalties on the platform will remain optional.
Jack Lu, CEO and co-founder of Magic Eden, stated in a press statement, “The Solana community has been waiting for answers to NFT royalties.” Our goal with Open Creator Protocol is to instantly offer royalties for creators launching new collections, while coordinating with ecosystem partners to develop more options.

In addition, the new protocol features dynamic royalties, a feature that establishes a link between an NFT’s selling price and royalty amount based on a linear price curve, as well as adjustable token transferability, allowing producers to gamify the trade rules for their collection.

The site will contain a free “Magic Mint” for users to test the Open Creator Protocol and its capabilities upon its introduction.

The new protocol came one month after the leading Solana NFT marketplace shifted to an optional royalty scheme, tweeting at the time that the change had “major ramifications for the ecosystem.” Optional royalties benefit traders who wish to sell quickly and generate a profit.

“Unfortunately, protocol-level royalties are not enforceable, therefore we have had to adjust to changing market conditions,” it stated at the time. Several other markets, notably X2Y2 and LooksRare, decided to make author royalties optional, but X2Y2 subsequently reversed its decision in response to criticism.

OpenSea, a leading NFT marketplace, took a firm stance against making royalties optional earlier this month, stating that the industry was “moving toward much smaller fees paid to producers.”

In the meanwhile, the NFT marketplace Exchange.Art introduced a new standard called the “Royalties Protection Standard” earlier this month to ensure that royalties are enforced on secondary sales of NFTs that originated on its platform.

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