OpenSea, a nonfungible (NFT) marketplace, appears to have weighed in on the issue about NFT royalties by introducing a new “on-chain” tool to assist producers in enforcing royalties.
While other players in the field have been implementing their own techniques over the past few months, the NFT marketplace, which according to CoinGecko commands 66% of the market share in NFT markets, has remained somewhat quiet on the matter of royalties and enforcement.
OpenSea CEO Devin Finzer wrote in a blog post on November 6 that they have seen the voluntary creator fee payment rate decrease to less than 20% in marketplaces where payments are optional, while in other marketplaces creator fees are just not paid at all.
The CEO of OpenSea announced the debut of a new tool in the marketplace that will enable authors to deliver “on-chain enforcement” of their royalties.
There’s been a lot of discussion over the past few months about business models for NFT creators & whether creator fees (“royalties”) are viable.
Given our role in the ecosystem, we want to take a thoughtful, principled approach to this topic & to lead w/ solutions. 🧵
— OpenSea (@opensea) November 6, 2022
The tool, which Finzer called a “simple code snippet,” enables developers to impose royalties on present and past NFT collection smart contracts as well as upgradeable smart contracts that have already been created. Additionally, the code will limit the sale of NFT to only those marketplaces that impose creator fees.
“It’s clear that many creators want the ability to enforce fees on-chain; and fundamentally, we believe that the choice should be theirs to make — it shouldn’t be a decision made for them by marketplaces,” Finzer said.
Finzer added that OpenSea won’t enforce royalties for new collections that don’t opt-in, but it will do so for any new collections employing an on-chain enforcement mechanism.
OpenSea is not forcing people to use their specific solution, according to Finzer in an accompanying Twitter Spaces. Instead, creators are free to use whatever solution you want and implement it anyway, he added.
