In recent times, several NFT marketplaces had either rejected such fees or made them optional for traders to pay.
The non-fungible token (NFT) space may have been spared the brunt of the catastrophic fall of FTX, but the battle for market share continues. Amidst the chaos, Magic Eden – the most popular marketplace for Solana NFTs – announced the launch of a new tool that will enforce royalties on all new collections that opt-in.
Built on top of Solana’s SPL managed-token standard, the open-source tool is called “Open Creator Protocol (OCP)” and will help creators to protect their royalties. Additional features, such as dynamic royalties and customizable token transferability, will also be enabled.
Creator Royalties in Magic Eden
According to the official press release, creators adopting OCP will be able to ban marketplaces that have not imposed royalties on their collections. The tool will impact creators launching new collections starting December 2nd. Royalties will remain optional on Magic Eden’s marketplace for new collections that do not use OCP.
While highlighting the growing anticipation for solutions to NFT royalties, Jack Lu, CEO and Co-Founder of Magic Eden, said,
“We have been in active conversations with multiple ecosystem partners to identify solutions for creators in a timely manner. Our intention with Open Creator Protocol is to immediately support royalties for creators launching new collections while continuing to coordinate with ecosystem partners for more solutions.”
Magic Eden honored creator-set royalties until mid-October this year. However, it faced stiff competition from rival NFT marketplaces on Solana, which began rejecting royalties or making the system optional for traders.
Magic Eden then switched to an optional royalty model in what was considered to be a huge blow to royalty supporters in the network. The move would essentially enable buyers or sellers of NFTs to choose what percentage cut of the sale is returned to the original artist.
Following the decision, the marketplace assured that it still supported creator royalties and will explore ways to make royalties enforceable.
Creator royalties allow creators on a marketplace to make money on secondary sales. However, if markets themselves don’t collect, creators don’t get paid.
NFT giant OpenSea also faced a similar dilemma with dwindling market share and revealed considering making them optional for traders. Following creator backlash, however, the marketplace reversed its decision and said that it would continue to enforce creator royalty fees going forward.