OpenSea, once the dominant NFT marketplace, announced Thursday that it will stop enforcing royalty fees paid to artists on secondary sales starting August 31. The move represents OpenSea’s latest strategy shift as it struggles to retain market share.
Previously, OpenSea creators could require buyers to pay a 2.5% to 10% royalty on resales, providing passive income after the initial sale. Now, creators can only indicate a suggested royalty that buyers can optionally pay as a tip.
For existing NFT collections, enforced royalties will remain until February 2024. But eventually, all creator royalties will become optional across OpenSea’s platform.
CEO Devin Finzer stated this eliminates “ineffective, unilateral enforcement” of fees. However, many artists have already criticized the change as detrimental to their interests.
The policy pivot comes as upstart competitors like Blur undercut OpenSea by making royalties fully optional, sparking a race to the bottom. Blur’s free-market approach and lucrative rewards helped it overtake OpenSea as the top NFT marketplace by volume earlier this year.
With NFT trading declining across platforms, OpenSea is desperately trying to retain users amidst intensifying competition. But other marketplaces argue dropping creator protections erodes the ethos of empowering artists in crypto.
Beyond royalties, OpenSea still charges a 2.5% platform fee on trades unlike Blur’s zero-fee model. As marketplaces scrap over a shrinking user base, OpenSea faces ongoing challenges to revive its fortunes while balancing creator rights.
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