The decentralized future of Web3 and Non-fungible Tokens (NFTs) had once promised artists perpetual royalties from the resale of their digital artworks. But a recent announcement from OpenSea, one of the dominant players in the NFT marketplace, challenges this ideal.
OpenSea intends to transform resale royalty fees from a mandatory commitment to a discretionary tip. This essentially means sellers can opt whether to give the original artists a percentage of the resale price or not.
Here’s how this plays out after Aug 31:
— OpenSea (@opensea) August 17, 2023
- New collections: creator fees optional
- Existing collections using our Operator Filter: we’ll enforce preferred creator fees on OpenSea through Feb 29 ‘24; optional after
- Existing collections not using our Operator Filter: no change
As the NFT market experienced a downturn, platforms reduced their trading fees, with some, like Blur, even forgoing the enforcement of artist royalties, all in a bid to draw sellers. While OpenSea will halt the enforcement of royalties on all fresh NFTs by the end of August, it will maintain fees on selected existing collections till the full transition in March 2024.
The decision has sparked a maelstrom of reactions in the NFT sphere. Many feel this would disproportionately disadvantage smaller artists and disrupt the envisioned artist-buyer dynamics inherent to the NFT premise.
However, not all view this shift pessimistically. OpenSea's CEO, Devin Finzer, views it as an evolutionary step, highlighting that artists might find alternative revenue streams, moving beyond relying solely on resale royalties.
His statement, “Our role in this ecosystem is to empower innovation beyond a single use case or business model,” rings controversial as it implies OpenSea's withdrawal from the NFT world's foundational business structure.
