Magic Eden, a Solana-based nonfungible token marketplace, has moved to an optional royalty model. This follows in the footsteps set by X2Y2 in August. However, it is reluctantly.
The optional royalty model gives buyers the ability to decide how much they would like to contribute to NFT projects. This means that creators might not get royalties when their artworks sell.
The NFT marketplace posted Oct. 14 that it had made the decision after “difficult reflection” and “discussions with many creators”, and because the market “has been shifting towards optional creator royalty payments for a while.”
NFT marketplace shared this graph that shows how the number of cumulative wallets using optional royalty marketplaces to purchase or sell NFTs soared in September.
4/ Since a while, the market has been moving towards creator royalties. These charts show the cumulative wallets that have used NFT marketplaces as an option to purchase or sell NFTs. pic.twitter.com/wxiU800l2P
— Magic Eden (@MagicEden).
October 15, 2022
The Twitter NFT community has had split opinions about the move. Some see it as positive for the industry’s long-term health, while others view skipping royalties to be akin “theft.”
Mike “Beeple”, a well-known NFT artist, pointed out to his 700,000. followers Oct. 15, that while he doesn’t love Magic Eden or what others are doing it, the change from a seller’s fee to a buyers premium could be better for long-term industry.
While I don’t support royalties and I don’t like what @MagicEden is doing, I think they have made a key change. They switched from a seller’s FEE to a buyer’s PREMIUM. I think this is much more sustainable in the long-term.
— beeple (@beeple).
October 15, 2022
CaptainFuego, a Twitter user behind Fuego Labs told his nearly 10,000 followers that Royalties were stupid and shouldn’t exist. It’s great to see platforms adopt this approach.
Others were less critical of the changes. Brocolli DAO claimed that royalties were necessary in an immature eco-system, noting that they have already lost $27,000 in royalties as a result of 0% sales on other marketplaces.
ROYALTIES:
We took proactive steps to ensure the integrity of our project after Magic Eden announced that they would be making royalties optional.
We have run analytics to determine how much we have lost in royalties and 0% sales on other marketplaces.
Broccoli DAO (@Broccoli_DAO).
October 15, 2022
“In the future, we will block anyone who hasn’t paid royalties from accessing Discord channels. It is theft to not pay royalties. They said that they would treat it as such.
Cozy the Caller, an analyst who claims to be a prophet, gave a dire prediction to their 108,000 followers , saying “I see a scenario where Magic Eden goes to 0% and loses its market share to a market enforcing royalty payments in an innovative manner.”
It’s truly unbelievable. I don’t know the person advising magic eden, but imagine him fumbling with a billion-dollar company man
I can envision a scenario where magic eden drops to 0% and loses market share to a marketplace that imposes royalties in a new way
Unreal!
— Cozy the Caller (@cozypront).
October 15, 2022
Magic Eden stated that the change was not made lightly and that they “actively tried to avoid it and spent the past few weeks exploring other options.”
The NFT marketplace tried to create a tool to enforce creator royalties. It was called Meta Shield and was designed to deter NFT buyers who try to avoid creator royalties.
Magic Eden stated in its most recent post: “Unfortunately royalties aren’t enforceable at a protocol level. So we had to adapt to changing market dynamics.”
NFT marketplace X2Y2 revealed that they had introduced a similar option, which allows buyers to set the royalty fees when purchasing an NFT.
This move does not appear to have had an impact on the platform’s use according data from NFTGo, in three months X2Y2’s trading volume has risen to the top, surpassing OpenSea.
Source: NFTGO
Cointelegraph reached out to Magic Eden, but did not receive a response as of publication.
