In 2023, artist royalties saw a substantial decrease, dropping from USD 14,574,173 in the previous year to a mere USD 1,580,767, signifying a challenging period for NFT artists. This drop can be linked to a problem that NFT artists have been facing this year, especially when NFT markets like Opensea made NFT royalties an optional feature on their platforms.
Nonetheless, there’s a glimmer of hope on the horizon. Just last week, Magic Eden, a multi-chain NFT marketplace, announced that it will be collaborating with Yuga Labs, the company behind Bored Ape Yacht Club, to introduce a new Ethereum platform. Magic Eden stressed its commitment to paying artist royalties on NFT sales as part of its unwavering support for creators.
Magic Eden’s CEO, Jack Lu, co-founded the company and expressed excitement about it, saying that they are delighted to demonstrate their commitment tangibly.
According to Lu, Magic Eden has redesigned the Ethereum marketplace and will employ new smart contracts with technological advancements that guarantee NFT royalties are distributed during secondary market sales.
Although Lu did clarify that the standard ERC-721 Ethereum non-fungible token (NFT) standard will be used, technical specifics will be made public before the marketplace’s launch. Royalties will be imposed on NFTs that are minted with specific “properties of the marketplace contract.”
According to Lu, the modification won’t affect how merchants communicate with Magic Eden; for instance, it won’t require them to provide identification through know-your-customer (KYC) procedures.
OpenSea’s Shift in NFT Royalties Stance
OpenSea, a prominent marketplace, made a significant shift in its stance regarding royalties last August, abandoning its initial commitment to honor such fees. Yuga Labs, which had previously voiced its disapproval in late 2022 when OpenSea made it known that it was considering moving away from royalties, criticized this decision.
Yuga Labs, being a company at the forefront of the NFT space, felt the need to stand up for content creators.
Yuga Labs and Magic Eden’s press release announcing the news seems to take a subtle dig at OpenSea, stating that the companies are making it clear that protecting creator royalties is non-negotiable. They are taking a clear stance amidst a sea of other marketplaces that turn their backs on creative entrepreneurs.
According to the statement, Yuga Labs will only work with markets that support these values going forward, guaranteeing that creators are treated fairly.
According to the companies, Yuga Labs expects that the contracts introduced through this collaboration will be widely embraced. Other marketplaces are free to choose to use them. Moreover, other NFT developers can use the contracts to mint their projects and apply comparable safeguards.
Yuga Labs and Magic Eden have taken a bold step to solve the urgent problem of NFT royalties in the ever-evolving NFT landscape. They send a strong statement to the industry with their steadfast dedication to protecting creator royalties.