Crypto Twitter split after non-profit tech platform shifts to royalties
New York City: In spite of the switch to an optional royalties approach, Magic Eden will continue to have full royalties set as the default for all listings and collections.
Solana-based Magic Eden is the latest nonfungible token (NFT) marketplace to switch to an optional royalty model, following in the footsteps of X2Y2 in August despite the fact that Magic Eden made the decision to do so unwillingly.
Because buyers are given the ability to determine the amount of royalties they wish to contribute to an NFT project under the optional royalties model, there is a possibility that some creators may not receive royalties when their artworks are sold. This is because there is a chance that buyers may decide not to contribute any royalties at all.
The NFT marketplace said in a post dated October 14 that the decision was made after “tough consideration and talks with many artists.” The marketplace also stated that the decision was made since the “industry has been changing towards optional creator royalties for sometime.”
The NFT marketplace distributed a graph illustrating the rapid increase in the number of cumulative wallets using optional royalty markets in late September. These wallets were used to purchase or sell NFTs.
However, the decision has been received with mixed reactions from members of Twitter’s NFT community. While some members of the community saw the move as being beneficial to the industry as a whole in the long run, other members of the community have equated bypassing royalties with stealing.
On October 15, well-known NFT artist Mike “Beeple” Winkleman pointed out to his 700,000 followers that while he doesn’t love what Magic Eden and others are doing, the switch from a seller’s fee to a buyer’s premium could be better for the industry in the long term. He said this in response to a question about why he doesn’t love what Magic Eden and others are doing.
Another user on Twitter going by the moniker CaptainFuego, who is the person behind Fuego Labs, said to their almost 10,000 followers that “Royalties are dumb and shouldn’t exist. I am pleased to see that platforms are following this approach.
Some people had a more negative reaction to the move than others. Brocolli DAO argued that “royalties are needed in an immature ecosystem,” noting that according to their calculations, they’ve already lost as much as $27,000 in royalties due to 0% purchases on other marketplaces. Brocolli DAO’s argument was based on the fact that “royalties are needed in an immature ecosystem.”
Magic Eden said that the decision to make the move was not made lightly, and that they “have actively been attempting to prevent this result and have spent the previous several weeks considering possible options.”
The NFT marketplace made an effort to release a royalty enforcement tool called Meta Shield at the beginning of this month. The purpose of this effort was to discourage NFT buyers from attempting to avoid paying creator royalties by providing creators with a tool that could flag and blur NFTs that sold bypassing royalties.
In its most recent article, Magic Eden said that “unfortunately, royalties are not enforced on a protocol level,” which meant that the company “had to adjust to altering market realities.”
When purchasing an NFT, purchasers will have the ability to choose the royalty charge thanks to a new feature that was going to be introduced by the NFT marketplace X2Y2 in August.
According to information found on NFTGo, the relocation does not seem to have had an effect on the utilization of the platform. In the previous three months, X2Y2’s trading volume has been rated first, exceeding OpenSea’s.