Billionaire Mark Cuban and Yuga Labs condemn OpenSea over royalty changes
Tech billionaire Mark Cuban and Bored Ape Yacht Club creator Yuga Labs have voiced their criticism against the NFT trading platform OpenSea. The platform announced its intention to end the enforcement of creator royalties, a move that has sparked a considerable backlash from its users and investors.
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Mark Cuban criticizes OpenSea and offers a solution
Cuban, who is also an OpenSea investor, was quick to denounce the OpenSea changes. In a tweet, Cuban stated that the company is making a huge mistake and hurting the NFT industry.
Cuban’s critique may sting all the more given his participation in OpenSea’s $23 million Series A funding round in 2021. The billionaire went on to suggest a solution to the royalty problem in the following tweet:
“Make the transactions free for NFTs that pay their royalty and then take a percent of the royalty as the fee.”
OpenSea shifting stances on artists’ royalties
The NFT marketplace’s move to stop enforcing creator royalties—fees that typically range from 2.5% to 10% and are added to secondary sales of NFTs for creator compensation—has stirred up discontent. OpenSea CEO and co-founder Devin Finzer had previously defended these fees as crucial for protecting the rights of artists.
OpenSea’s decision has been perceived as a concession to rival NFT marketplaces that have also cut creator royalties in a bid to attract traders. However, creators like Yuga Labs and Betty, the pseudonymous founder of the NFT project Deadfellaz, have condemned the decision.
Yuga Labs joins the roast
Yuga Labs has announced that it will begin phasing out its compatibility with OpenSea in response to the change. The company will ban OpenSea from trading both new Yuga Labs projects and those with upgradeable smart contracts by February 2024.
Collections owned by Yuga, including Bored Ape and CryptoPunks, have generated more than $9 billion in NFT trades throughout the NFT market, as reported by CryptoSlam data.
Betty of Deadfellaz called for an industry-wide boycott of OpenSea on Twitter. She criticized the company for betraying artists, particularly underrepresented ones, by renouncing crypto-native principles such as profit-sharing through royalties:
“Emerging artists will never, ever see the head start almost every single major brand and artist received prior to all of this, (…) Innovation will stall, reliance on VC funding will need to become the norm. I’ve said it a million times, but underrepresented creators will suffer.”
Smaller marketplaces, like Rarible, were quick to emphasize their unwavering commitment to creator royalties. Nevertheless, OpenSea’s announcement has been seen by some on Twitter as a death knell for creator royalties across the industry, as OpenSea was the largest NFT trading platform still enforcing the policy.
