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Prominent NFT marketplace over the Solana blockchain Magic Eden seems to have followed X2Y2 as it has changed to an optional royalty model for nonfungible token (NFT) marketplaces.
Buyers can choose the amount of royalties they want to contribute to an NFT project under the optional royalties model, which raises the possibility that some creators won’t be compensated for the sale of their works.
Magic Eden stated in a post on October 14 that the choice was made after “tough consideration and discussions with many authors” and that the “industry has been transitioning towards optional creator royalties for a while.”
The optional royalty marketplace for NFTs provided a graph demonstrating the dramatic increase in the number of cumulative wallets using it to buy or sell NFTs in late September.
However, the decision has generated conflicting reactions from Twitter’s NFT community. While some see it as advantageous for the industry’s long-term health, others have compared skipping royalties to “theft.”
Despite not liking what Magic Eden and others are doing, well-known NFT artist Mike “Beeple” Winkleman pointed out to his 700,000 followers on October 15 that the shift from a seller’s fee to a buyer’s premium would be better for the business overall.
Fuego Labs’ CaptainFuego had stated to their roughly 10,000 followers on Twitter that “Royals are ridiculous and shouldn’t exist” and he is happy to see platforms adopting this strategy.
Others criticized the adjustment more harshly. According to Broccoli DAO’s calculations, they have already lost as much as $27,000 in royalties as a result of 0% purchases on other marketplaces. This is why they claim that “royalties are needed in an immature ecosystem.”
“Going forward, we will prevent anyone from entering our Discord channels who hasn’t paid royalties. Theft is when royalties are not paid. We will handle it accordingly,” they declared.
In a message to their 108,000 followers, Cozy the Caller, a self-described analyst, predicted the worst: “I can envisage a scenario in which Magic Eden goes 0% and loses their market share to a marketplace imposing royalties in an inventive method.”
The adjustment, according to Magic Eden, was not made lightly; instead, “we actively have been attempting to avoid this consequence and have spent the last few weeks studying potential alternatives.”
The NFT market tried to introduce Meta Shield, a tool for enforcing royalties, last month in an effort to discourage NFT buyers from trying to avoid paying creator royalties by providing creators with a way to identify and hide NFTs that sold without paying royalties.
In its most recent post, Magic Eden stated that because royalties are not enforceable at the protocol level, the company has had to adjust to changing market circumstances.
NFT marketplace X2Y2 announced in August that they would be releasing a comparable feature that would let customers choose the royalty charge when purchasing an NFT.
The change doesn’t seem to have had an impact on platform usage; in fact, data on NFTGo shows that X2Y2 has surpassed OpenSea in terms of trading volume during the past three months.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
