Magic Eden will be the last to participate in the NFT royal debate

Magic Eden will be the last to participate in the NFT royal debate
Magic Eden will be the last to participate in the NFT royal debate

The debate about creator fees or royalties on NFTs has been going on for some time now. Both sides, the creators and the collectors, have argued why or why not there should be a royalty on top of the selling price of an NFT.

NFT marketplaces have become proxies in this debate, rolling out policies that favor both sides.

The uproar

The current standards in the NFT industry make it difficult to enforce royalties for on-chain creators. Although artists have the ability to be coded into the smart contracts that settle NFT transactions, there are marketplaces that don’t honor them or collectors that have found a way to bypass it entirely.

While creators enjoy payouts forever, it’s the collectors/traders who feel the heat when they have to fork out a royalty on top of the selling price, and given that NFTs have been fetching a decent amount lately, the royalty could amount to up to approx. an uncomfortable amount for some.

NFT artists believe that they should be rewarded for their creations, not only at the initial sale, but also for transactions that take place in the secondary market.

Marketplace batting for collectors

The launch of Sudoswap’s SudoAMM breathed new life into the debate. Sudoswap is an Ethereum NFT marketplace known for not honoring artist royalties on NFT sales. Buyers and sellers are usually exempt from paying the 5% or 10% creator royalty that comes with NFTs.

Data from blockchain analytics firm Dune Analytics paints a clearer picture of how the NFT community feels about royalty-free marketplaces like Sudoswap.

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While daily volume peaked in August with a consistent weekly average, weekly volume has declined by nearly 35% in the month of September. However, the total volume has been steadily increasing with a current total of 26,329 ETH.

The last NFT marketplace to come out against royalty payments is X2Y2. The platform announced Aug. 26 that buyers will be able to “choose the number of royalties they want to contribute to projects.”

Marketplaces batting for creators

Contrary to X2Y2’s decision, Solana-based NFT marketplace Magic Eden released a royalty enforcement tool earlier this week. MetaShield gave creators the ability to flag NFTs that bypass royalties.

Within days of its launch, the tool has had mixed reviews on Twitter, with collectors voice their disappointment while the creators the tribute the platform’s efforts to secure their interest.

Magic Eden has defended MetaShield, echoing the general sentiment that “hard-working creators deserve to be rewarded and paid”. Magic Eden expressed that creators were penalized by having collections traded on zero royalty marketplaces

NFT giants like OpenSea respect the royalty amount set by artists, while providing the option to turn it off. However, the settlement is not immediate. OpenSea acts as an intermediary and only sends royalties after the platform receives them.

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