One of the major appeals of NFTs was the creator royalty-a mechanism that enabled artists to automatically receive a percentage of secondary sales as ongoing revenue. However, due to policy shifts by major marketplaces and a new industry consensus, royalties have become “optional.” In other words, whether or not royalties are paid is now left to the discretion of buyers and sellers, and in practice, this means the system is being phased out.
Many creators and artists feel deeply disappointed, anxious, and even betrayed by this development.
Table of Contents
Why have NFT royalties become optional?
- Since 2022, several leading marketplaces-including LooksRare, X2Y2, and Magic Eden-have announced the move to optional royalties.
- By reducing or eliminating transaction fees and royalties, these platforms aim to attract resellers and high-frequency traders, thereby boosting trading volume.
- OpenSea, the largest NFT marketplace, also shifted its policy in August 2023, making royalties optional for new collections.
The emptiness of losing what was supposed to be a “good thing” about NFTs
In the early days of NFTs, the ability to automate royalty payments through blockchain smart contracts was hailed as a revolutionary innovation-something not possible in traditional art or music industries.
- Creators could earn ongoing revenue from secondary sales
- Transparency and automation were guaranteed
- A new model for the creator economy was born
Yet, these values have been quickly overturned by market competition and the pursuit of greater user numbers-a shift in consensus that has left many creators behind.
Impact on creators and community reactions
- As the foundation of their revenue model is shaken, more creators are questioning the meaning of NFTs and the ideals of Web3.
- Independent and small-scale artists are especially hard-hit by the loss of reliable royalty income.
- On the other hand, some marketplaces like Rarible and Nifty Gateway continue to uphold royalty protections.
So, where do the “goodness” and “ideals” of NFTs really lie?
While the technical structure of NFTs may be immutable, their value and rules are heavily influenced by social consensus and economic logic. Mechanisms once believed to be the “good part” of NFTs can be easily changed by shifts in the industry or the times.
The ideals of NFTs remain unsettled. It’s up to creators and the community to keep questioning and seeking systems that everyone can truly accept.
Leave a Reply