OpenSea scrapes mandatory creator royalties
OpenSea announced significant changes to its creator fees structure to better align with the principles of choice and ownership central to the decentralized web3 ecosystem. The leading non-fungible token (NFT) marketplace is sunsetting the OpenSea Operator Filter and transitioning to optional creator fees starting August 31.
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Operator Filter failed
The Operator Filter was introduced as a tool to empower creators by restricting the sale of their collections to marketplaces that enforce creator fees on secondary sales. However, its effectiveness depended on universal adoption across the web3 ecosystem, which failed to materialize.
One reason for the unsuccessful implementation of the Operator Filter is the growing trend towards zero creator fees.
Numerous web3 marketplaces and aggregators, such as Blur, Dew, and LooksRare, have found ways to bypass the Operator Filter and avoid enforcing creator fees. The filter’s blocking mechanism relies on smart contract addresses, which makes it impossible to differentiate between marketplaces that do and do not enforce creator fees when using the same contract.
Furthermore, the Operator Filter has been met with resistance from some creators and collectors. Creators felt that it limited their control over where their collections are sold, while collectors believed it conflicted with their full ownership rights over NFTs.
In response to these concerns, OpenSea is giving collectors more flexibility and choice on creator fees by making them optional.
Royalty fees are now optional
OpenSea also recognizes that creator fees are just one of many revenue streams available to creators in the web3 ecosystem. The diverse applications and utility of NFT technology require a broader approach to monetization beyond resale fees.
To address this, OpenSea has dedicated a large part of its roadmap to power new use cases, including digital and physical redeemables, and to promote these use cases more effectively across primary and secondary experiences.
As part of these changes, OpenSea will enforce the creator’s preferred fees on all secondary sales for collections that enabled the Operator Filter prior to August 31, and for existing collections on all non-Ethereum blockchains, through February 29, 2024. Thereafter, creator fees will be optional for all collections.
OpenSea – Changes to the user interface
OpenSea has updated its platform to clarify the creator’s preferred fee to collectors, both buyers and sellers. A filter will be introduced on the collection page, allowing buyers to search for listings that align with the creator’s preferred fee. These listings will also be clearly identified on the item pages.
Sellers will benefit from an improved experience as well, as they can choose the creator’s preferred fee or set their own custom fee when listing items.
Losing the battle
While the debate over NFT royalties has since cooled down, it is now clear that mandatory fees are losing the battle. Nifty was one of the few marketplaces that supported artist royalties. However, with the platform announcing its imminent shutdown, the number of marketplaces that support creator fees is clearly dwindling.
