The NFT marketplace’s open-source Open Creator Protocol will make sure that NFT creators get paid royalties for new collections that choose to use the tool.
Magic Eden, a Solana-based marketplace for nonfungible tokens (NFTs), is the latest platform to release a tool that lets creators collect royalties on their collections.
It comes after the rival NFT market OpenSea announced a similar tool at the beginning of November.
The Open Creator Protocol is an open-source royalty enforcement tool that was announced on December 1. It is built on top of Solana’s SPL token standard (OCP). This will make it possible to collect royalties on new collections that choose to use the standard as of Dec. 2.
At Solana’s Breakpoint 2022 conference on November 5, Lu brought up the idea of NFTs that enforce royalties. He said that NFT creators need a “sustained revenue model.”
Creators who use OCP will also be able to ban marketplaces that haven’t paid royalties on their collections. Magic Eden will still have optional royalties for collections that don’t use OCP on its platform.
In a Dec. 1 Twitter thread, Magic Eden said it “can’t retroactively apply OCP to existing collections.” It told creators that they would have to do “burn and re-mints,” where the NFTs are sent to an unrecoverable wallet address and then re-issued by the collection.
“We have been talking with a number of ecosystem partners to find quick solutions for creators,” Lu said in the statement. He also said that the marketplace’s goal with OCP was to “immediately support royalties” for new collections while it worked with other partners to find more solutions.
Magic Eden also claims that its protocol allows creators to implement dynamic royalties, which could decrease the value of royalties for buyers who pay higher prices, and customizable token transferability, which could see, for example, NFTs limited to a certain number of trades or subject to a trade freeze for a specified amount of time.
In October, Magic Eden switched to a model where customers may choose what percentage of royalties they want to pay for a project, which has been met with mixed reactions from the NFT community on Twitter.
An identical on-chain tool, introduced by OpenSea in early November, prevented NFTs from being sold elsewhere except on marketplaces that required payment of royalties; the OCP tool is a direct successor to that initiative.
Before switching to voluntary royalties, in September, Magic Eden developed a comparable royalty enforcement mechanism called MetaShield in collaboration with peer marketplace and aggregator Coral Cube.
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