Non-fungible token marketplace—OpenSea develops an on-chain method for enforcing NFT royalties.
The royalty enforcement tool only applies to new NFT collections, with a decision on existing collections to be taken later.
Weighed in on the NFT royalties debate, unveiling a new "on-chain" tool to assist creators in enforcing royalties.
As per reports, the NFT marketplace, which controls 66% of the market share in NFT marketplaces, has been relatively silent on the matter of royalties and enforcement. Meanwhile, others in the space have been adopting their own methods during the last few months.
In a blog post published on November 6, OpenSea CEO Devin Finzer stated that in markets where payments are optional, they've "seen the voluntary creator fee payment rate shrink to less than 20%," while in others, creator fees are "just not paid at all."
The CEO of OpenSea announced the launch of a new solution that will allow creators to provide "on-chain enforcement" of their royalties.
OpenSea’s blog post reads: "there has been a lot of discussion in recent months about economic models for NFT creators and whether creator fees ("royalties") are realistic. We want to take a serious, principled approach to this problem and lead with solutions, given our role in the ecosystem."
The solution, according to Finzer, is a "simple code snippet" that allows creators to enforce royalties on new and future NFT collection smart contracts, as well as existing upgradeable smart contracts. In addition, the code will limit NFT sales to just markets that charge creator fees.
Finzer also stated that OpenSea will use an on-chain enforcement tool to enforce royalties for new collections, but will not do so for new collections that do not opt-in.
In an accompanying Twitter Spaces, Finzer stressed that OpenSea is "not compelling individuals to utilize our specific solution," and that creator can use "whatever solution they want and execute it."
“We provide a prototype GitHub repo that assists you in using a solution that simply prohibits lists marketplace that does not support creator fees. Nevertheless, if you want creator fees, you must impose them on chain.”
Due to implementation issues, the tool will not be available for existing NFT collections for the time being.
According to Finzer, this might include options such as continuing to enforce off-chain fees for select subsets of collections, enabling optional creator fees, and cooperating on various on-chain enforcement options for creators.
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