OpenSea chief executive Devin Finzer revealed in a blog post on Sunday that the company would launch a tool to provide creators with “on-chain enforcement of their non-fungible token (NFT) royalties.”
He noted in his post that for marketplaces with optional fees, voluntary creator fee payments had “dwindle to less than 20 [percent]” or were “simply not paid at all.”
There’s been a lot of discussion over the past few months about business models for NFT creators & whether creator fees (“royalties”) are viable.
— OpenSea (@opensea) November 6, 2022
Given our role in the ecosystem, we want to take a thoughtful, principled approach to this topic & to lead w/ solutions. 🧵
It added that business models from most creators in the NFT market were “subject to enforcement discretion of marketplaces rather than code.”
The post read: “With many marketplaces choosing to stop enforcing creator fees, to put it bluntly, the last few months haven’t felt WAGMI.”
On-Chain Enhancements
To correct the issue, Finzer explained that OpenSea had created the on-chain tool to enforce fees from 12:00 ET on 8 November. It added it would also launch tools and enhancements to enforce the new standard while engaging with the community for feedback.
OpenSea may take further measures on 8 December, including continued enforcement, optional creator fees, and collaborating with other enforcement options.
Explaining further, Finzer added: “We recognize not all creators, collections, and communities are the same and we are looking to create a long-term policy that reflects that.”
Laying Down the Law
According to the CEO, the new measures would include adding a code snippet for creators to facilitate current and future upgradeable contracts and checking new collections to verify if items can sell on marketplaces without creator fee enforcement.
Concluding, he said: “[Technical] decisions like this involve tradeoffs: enforcing creator fees on-chain requires sacrificing some of the censorship-resistance and permissionless nature of NFTs.
OpenSea also believe that creators had the power to “build the collections and communities that they desire” and that buyers and sellers could have the freedom to “choose which collections they do and don’t engage with.”
