OpenSea has gone back on its word to enforce digital creator fees, reducing them to a minimum of 0.5% and allowing users to optionally pay creation royalties. NFT Twitter has had mixed reactions to the issue, with most users stating that this is the wrong direction to move. Although, the platform calls this “the beginning of a new era” in the NFT industry. But is it really? Let’s go deeper.
What’s going on with OpenSea and creator fees?
Leading NFT marketplace Opensea has been trying to ensure that creators get a fair share of the profits when their NFTs are sold. But they’ve had a hard time doing that because many other NFT marketplaces don’t tax creator earnings. To try to solve this problem, OpenSea created something called Carrier Filter. This filter encourages other marketplaces to apply creator earnings. But this didn’t work as well as they expected and now they are making some changes.
For a limited (promotional) time, OpenSea will not charge fees on transactions. They are also changing the way they handle creator earnings. Instead of enforcing creator earnings for all collections, they make it optional for collections that don’t have on-chain enforcement. This means that creators can choose to set their fees for each sale and buyers must pay a minimum fee of 0.5%.
OpenSea is also changing the way they filter markets that don’t apply creator earnings. In the past, they blocked any market that did not meet their standards. But now, they will only block markets that don’t have the same policies as OpenSea. This means that more collections in marketplaces will be able to list NFTs on OpenSea, even if they don’t fully apply creator earnings.
Around 80% of the total volume in the ecosystem does not pay full creator earnings, and most of the volume has moved to a zero fee environment. OpenSea hopes these changes will keep its platform competitive and provide creators with a more resilient solution.
Twitter NFT Reactions
It seems that with all the fuss about creator royalties and profits, NFT artists/creators always lose. As @NFTGod said “Everyone wins except the creator”. The move is essentially a strategic push to get ahead of OpenSea’s main competitor: the Blur NFT marketplace. With this “NFT Market War” going on, OpenSea drops its previous royalty fee of 10% to a mere 0.5%.
Also, lowering creator royalties may not be good for the NFT ecosystem as a whole. OpenSea also declared at the end of 2022 that royalties would be honored for contracts implemented before January 2, 2023. Because of this, many creators built projects on the platform, but now they are confused about the responses about the latest announcement.
According to many creators, even if the markets fall, an NFT ecosystem still exists because of its digital creators. But, on the other hand, if developers don’t earn anything from web3 infrastructures, they withdraw from the market.
AND Without its creators, an NFT market ceases to exist. Blur, on the other hand, incentivized their entire community with airdrops of “magic internet money” $BLUR. Recent news has flooded NFT Twitter, with collectors and members demanding OpenSea’s rumored airdrop and an official token soon.
No further updates are announced at the time of writing this article. NFTevening follows the story closely as it unfolds. In the meantime, here are some fun answers we found:
your ass blurred pic.twitter.com/sB4dfsgFk3
—Gabriel Haines | machetes.eth (@gabrielhaines) February 17, 2023
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This article is educational material.
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