NFT royalties enforced by OpenSea on-chain tool

Key points: 

• The CEO of OpenSea has announced that the marketplace has launched a new tool that allows developers to enforce their royalties "on-chain".
• Finzer also said that OpenSea will use an on-chain execution tool to collect royalties on new collectibles, but will not do so for new collectibles that have not opted in.
• Reactions from NFT creators and the Twitter community have been mixed.

Non-fungible (NFT) marketplace OpenSea appears to have taken a stance on the NFT royalty debate - launching a new "on-chain" tool to help developers enforce royalty payments.

According to CoinGecko, the NFT marketplace, which accounts for 66% of the NFT market, has been relatively silent on issues of royalties and enforcement, while others in the industry have implemented their own tactics in recent months.

In a Nov. 6 blog post, OpenSea CEO Devin Finzer noted that in markets where fees are optional, "it has been observed that the number of optional builder fees has dropped to less than 20%", while in other markets The builder fee "just doesn't pay at all".

The CEO of OpenSea has announced that the marketplace has launched a new tool that allows developers to enforce their royalties "on-chain".

Finzer described the tool as "simple code snippets" that allow developers to enforce licensing fees on new and future NFT collective smart contracts and existing scalable smart contracts. The code will also limit NFT sales to marketplaces that charge creator fees.

“It’s clear that many creators want to be able to enforce fees on-chain; fundamentally, we think the choice should be theirs — it shouldn’t be a choice the market makes for them,” Finzer said.

Finzer also said that OpenSea will use an on-chain execution tool to collect royalties on new collectibles, but will not do so for new collectibles that have not opted in.

In the accompanying Twitter Spaces, Finzer explained that OpenSea "doesn't require people to use our specific solution" and that developers can "use whatever solution they like and still implement it."

"We provide a template GitHub repository to help you use a solution that basically blocks listing marketplaces that don't support creator fees, you don't have to use this solution; the premise is that if you want creator fees, you have to enforce them on-chain.”

Due to implementation issues, the tool will also not be introduced for existing NFT collections for the time being.

“As far as we know, the only way to implement on-chain creator fees for existing collections with non-updatable smart contracts is to take drastic measures against their communities, such as transfer the canonical collections into new smart contracts,” Finzer says.

“In our view, exploring new forms of monetization and alternative methods to incentivize buyers and sellers to pay creator fees and ensure that creator fees are enforced on-chain for future collections is a better option for existing creators to explore,” he added road.

According to Finzer, this could include options such as further enforcement of off-chain fees for certain subsets of collections, the possibility of optional creator fees, and collaboration for creators on other on-chain enforcement options.

Reactions from NFT creators and the Twitter community have been mixed. Wab.eth, founder of the Sappy Seals NFT series and co-founder of The Pixlverse and Pixl Labs, told his nearly 60,000 followers, “While I fundamentally disagree with the abolition of royalties, I appreciate the execution.”

Other users have questions they don't think have been answered. Betty, alias of one of the creators of the Deadfellaz NFT series, told her 89,000 followers, "There doesn't seem to be a plan and no clear answer to the existing collection and artist royalties."

Although it was later pointed out, "I look forward to reading your more specific communication on the proposed strategy soon."