For artists, royalties are hugely important and gives them more financial freedom to create and produce more art.
Royalties are the fees that NFT artists earn every time their work changes hands
Photo Credit: OpenSea
OpenSea NFT marketplace has officially decided to continue mandating creator royalties on these digital collectibles. The decision comes after OpenSea recently received backlash for reconsidering the enforcement of creator royalties. Royalties are the fees that NFT artists earn every time their work changes hands. This means that creators are paid for their art, even on secondary sales. For artists, this is hugely important and gives them more financial freedom to create and produce more art.
OpenSea has expressed concerns that if all NFT marketplaces do not enforce royalties for creators, majority buyers will flock on those sites that do not make them pay royalties to the creators.
This operational pivot by NFT marketplaces will lead creators to give up on the rewards they could have earned from their art amid market slowdown.
In a Twitter thread, the platform revealed statistics that NFT marketplaces that are no longer demanding buyers to pay artist royalties have seen a spike in sales as compared to OpenSea itself.
MagicEden and LooksRare are among NFT marketplaces that have pulled back the requirement to contribute to the creators since earlier this year.
“Simply put, in the last week, almost half of the creator fees set by the top 20 collections were ignored. This amounts to well over $1 million (roughly Rs. 8 crore) for creators left on the table,” OpenSea said in its Twitter thread.
OpenSea had decided to revisit its royalty payment requirement after it witnessed a decline in its sales revenues in recent times.
As per a Reuters report, monthly sales volume on OpenSea plunged to $700 million (roughly Rs. 5,500 crore) in June, down from $2.6 billion (roughly Rs. 20,600 crore) in May and a far cry from January's peak of nearly $5 billion (roughly 40,000 crore).
The outcry from the creator community, however, managed to convince OpenSea to not revoke the fee requirement.
A royalty fee is set by the NFT artist and typically falls between five to ten percent of the secondary sale price.
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