Magic Eden defends launch of NFT royalty enforcement tool

by · September 15, 2022

Magic Eden defends launch of NFT royalty enforcement tool

Solana-based NFT marketplace Magic Eden has fended off some community backlash following the launch of MetaShield, its new enforcement tool aimed at deterring NFT buyers who circumvent creator royalties.

MetaShield, which was reportedly launched in partnership with NFT marketplace and aggregator Coral Cube saw mixed reactions from the NFT community after its September 12 launch, which was split on whether NFT marketplaces should protect creator rights or cut royalty fees to make NFTs cheaper for collectors.

The NFT Royalty Enforcement Tool is designed to allow NFT creators to flag and blur NFTs that may have been sold that managed to circumvent creator royalties.

In an eight-part Twitter mail on Wednesday, Magic Eden defended its new tool, noting that some of the “hard-working creators today” are being “punished” by “custom” royalty marketplaces.

The new tool comes just weeks after NFT marketplace X2Y2 introduced a new feature that gives buyers the freedom to decide if they pay a royalty fee – and if so, how much – when they buy an NFT.

Magic Eden cleared the air in its last thread, noting that it launched MetaShield to protect creators, rather than punish buyers.

“Most recognize that zero-royalty marketplaces for all creators should not become the ecosystem norm,” claimed Magic Eden:

“What we’re doing is experimenting, collaborating and shipping. MetaShield may not be perfect, but it gives creators an alternative in this debate.”

The NFT marketplace also confirmed that it will not take control of NFTs and that the royalty enforcement tool will not serve to penalize buyers.

According to Magic Eden, MetaShield was built to allow creators to “track Solana NFTs listed with custom royalties” and “take action where they see fit” to protect their brand.

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According to the Magic Eden website, NFT creators are granted “Editor” rights to protect the NFT, which allows them to change the royalty, add a watermark, or blur the image. When the debt is paid, the editor can restore the NFT to its original state.

Community reaction

The launch of Magic Eden’s MetaShield was initially met with mixed reactions from the community.

One Twitter user claimed the addition of MetaShield further centralized the Magic Eden NFT marketplace, while another Twitter user so no one will make NFTs if the creators use MetaShield.

Another Twitter user said they were worried that innocent buyers will be penalized as they want their newly purchased NFT shielded, saying:

“The biggest concern I have is that this penalizes the buyer – someone who may not know they made the wrong purchase. After a period of time, the NFT will suddenly be ‘shielded’. This will lead to an experience where they have to pay a lot more.”

However, many have also praised Magic Eden for “protecting” NFT creators.

Not all NFT markets have sided with Magic Eden. Sudoswap” decided not to adopt the royalty fee model in order to make the NFT platform more buyer-friendly by only subjecting them to standard platform fees.

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In addition to that, Langston Thomas of “nft now” said that even where smart contracts are put in place to pay royalties to creators, it is ultimately up to the NFT market to honor the royalty agreement.

This is because the NFT marketplace receives the royalty first via the transaction, and is under no obligation to transfer the royalty.