OpenSea, the largest NFT marketplace in the world made a decision about NFT royalties early in the week. The debate spread following the proliferation of optional marketplaces in the NFT space.
The Need for NFT Standards
Magic Eden, which operates Solana’s biggest NFT marketplace, also contends with the question of NFT royalties. And the company’s position was recently shared in Portugal.
Magic Eden’s CEO and co-founder, Jack Lu, addressed the matter at the Solana Breakpoint event happening in Lisbon. Lu called for new a standardized NFT regulation that will enforce NFT royalties at a technological and hard level.
He said the situation has presented an opportunity to raise a new asset category. Lu also revealed that Magic Eden has consulted with a lot of creators in order to sample their opinions.
The response, according to Lu varied from those who want sovereign NFT ownership to those who want royalty enforced. Some others want a new completely new business model entirely.
However, Lu called the attention of the conference to the fact that new NFT standards might have some trade-offs. He added that enforcing royalty means that the creator has some measure of control.
Expecting More Opportunities
While having a sideline interview with the media, Lu further elaborated on his position. He said the new NFTs that would enforce royalty is nothing like what is understood today.
For one, these new NFTs would have some measure of centralization pinned to them. The holders, Lu said, would surrender some control they have over the pieces to favor the creator.
As a matter of fact, they might no longer be called NFTs, Lu suggested. They might have a name that reflects their real nature at that time.
A lot of blockchains don’t protect royalties, it might then be that these market dynamics would enforce the same type of trends. And there are also a lot of opportunities to be unlocked, he concluded.
OpenSea CEO, Devin Finzer, on the other hand, said the platform studied other marketplaces where royalty was optional. Their observation returned with creators’ fees being almost non-existent.
OpenSea is, therefore, going to release a feature that would help creators enforce the payment of their royalties if they want it. It will generally not be compulsory for creators to subscribe to, only a matter of choice.
