Blockchain & Crypto

OpenSea Will Enforce NFT Royalties with On-Chain Tool

OpenSea goes against the flow with its new solution to impose NFT royalty fees

OpenSea NFT Royalties

OpenSea Will Enforce NFT Royalties with On-Chain Tool. Source: unsplash.com

While many NFT marketplaces are shifting to an optional royalty model, the leading industry marketplace OpenSea launches an on-chain tool to allow creators make sure they receive their royalty payments.

The leading NFT trading platform noted that in marketplaces with optional fees, the royalty payment rate fell to less than 20%, while in some marketplaces creator fees are not paid at all. However, as OpenSea CEO Devin Finzer noted, “the choice should be theirs [creators] to make — it shouldn’t be a decision made for them by marketplaces.”

Therefore, OpenSea launched a new tool that will allow creators to deliver “on-chain enforcement” of their royalties. Technically, it is a “simple code snippet,” which allows to enforcement of royalties on NFT smart contracts. The code will also restrict NFT sales to those marketplaces that enforce creator fees. 

At the same time, creators are not obliged to use the solution if they are not too concerned about royalty fees. Besides, they are not limited in their solution choices, so creators can use other on-chain tools if available. 

At the moment, OpenSea will enforce royalties only for new collections that opt-in. Applying it to existing NFT collections on non-upgradeable smart contracts is challenging. Thus, if creators want to receive royalty fees from their previous artwork, they should “explore new forms of monetization and alternative ways of incentivizing buyers and sellers to pay creator fees.”

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Nina Bobro

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https://payspacemagazine.com/

Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.