In November 2022, a new feature emerged on the digital horizon: the Operator Filter. Designed to empower creators, this tool essentially limited secondary sales of nonfungible tokens (NFTs) to marketplaces that recognized and enforced creator royalties. Platforms like Blur were notably excluded. However, a significant twist arrived on August 17. OpenSea, a central NFT platform, intended to retire this tool by month’s end. Creators like Yuga Labs see this as a threat to their NFT vision.
Yuga Labs Responds to OpenSea’s Decision
The ripple effects of OpenSea’s announcement were felt immediately. Yuga Labs CEO Daniel Alegre swiftly responded via Twitter. His message was clear: Yuga Labs would initiate a gradual withdrawal from using OpenSea’s SeaPort marketplace smart contract.
He stated, “Our commitment is to safeguard creator royalties, ensuring that they receive just compensation for their hard work.”
This stance found considerable support. The Bored Ape Yacht Club (BAYC) community and several NFT project founders lauded Yuga Labs’ decision.
The Controversy Surrounding Creator Royalties
Follow CryptoMode on Twitter, Youtube and TikTok for news updates! The debate over creator royalties isn’t new. It’s been a focal point of discussions in the NFT realm for over a year. In 2021, at the dawn of the NFT surge, enforcing creator royalties was common practice.
Yet, the NFT landscape began to shift in October 2022. Marketplaces like Blur entered the fray, capturing a significant market share. Their unique proposition? Zero trading fees combined with an optional creator royalty model. This move led to a noticeable drop in trading fees and royalty percentages, intensifying platform competition.
Currently, the NFT community remains divided. On one side are proponents of platforms like Blur, suggesting alternate creator compensation methods. On the other, they are firm believers in the indispensable nature of royalties.
The debate over NFT royalties is far from over. As the dynamics between platforms like OpenSea and entities like Yuga Labs evolve, it’s clear that the future of creator compensation in the NFT space will continue to be a contentious yet pivotal topic.
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