Last Updated on November 7, 2022 by Bitfinsider
The NFT marketplace, which, according to CoinGecko, commands 66% of the market share in NFT marketplaces, has been largely mute on the matter of royalties and enforcement, whilst others in the industry have implemented their own policies in recent months.
In a blog post dated 6 November, OpenSea CEO Devin Finzer stated that in marketplaces where costs are optional, the voluntary creator fee payment percentage has decreased to less than 20%, whilst in other marketplaces, creator fees are “just not paid at all.”
The CEO of OpenSea revealed that the marketplace has released a new mechanism that would enable authors to enforce their royalties “on-chain.”
Finzer defined the tool as a “simple code snippet” that enables producers to enforce royalties on current and future NFT collection smart contracts and existing smart contracts that may be upgraded. Additionally, the code will restrict sales of NFTs to only markets that impose creator fees.
“It’s quite evident that many producers want the power to impose fees on-chain,” Finzer said. “We truly believe that the decision should be theirs to make; it shouldn’t be decided for them by marketplaces.”
Finzer added that OpenSea will enforce royalties for new collections via an on-chain enforcement tool, but not for new collections that have not opted in.
Finzer explained in an accompanying Twitter Spaces that OpenSea “doesn’t require anybody to utilize our unique solution,” thus developers are free to deploy “whatever solution they like.”
“We give a template GitHub repository that enables you to deploy a solution that blocks listed marketplaces that do not support creator fees; however, you are not required to use this solution; if you want creator fees, you must impose them on chain.”
Due to development difficulties, the tool will not be implemented for current NFT collections at this time.
Finzer stated, “To the best of our knowledge, the only option to ensure on-chain creator fee enforcement for existing collections with non-upgradable smart contracts is to take severe measures with their communities, such as migrating the canonical collection to a new smart contract.”
Existing creators should investigate new kinds of monetization and alternate methods of incentivizing consumers and sellers to pay creator fees, and future collectors should ensure that creator fees are enforced on-chain, he added.
According to Finzer, this might include choices such as continuing to enforce off-chain fees for certain subsets of collections, allowing creator payments to be optional, and partnering on various on-chain enforcement options for creators.
Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: Above are some affiliate links and we may collect a share of sales or other compensation from the links on this page.
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.