OpenSea Floats On-chain Tool To Enforce NFT Royalties

OpenSea, a Nonfungible (NFT) marketplace appears to have taken a position in the NFT royalties debate — launching a new “on-chain” tool helping creators enforce royalties. 

iexclusivenews reports that while other players in the space have been implementing their own strategies over the past few months.

The NFT marketplace, which according to CoinGecko commands 66% of the market share in NFT marketplaces, has remained largely silent on the subject of royalties and enforcement.

OpenSea CEO Devin Finzer wrote in a blog post on November 6 that they have “watched the voluntary creator fee payment rate dwindle to less than 20%” in marketplaces where fees are optional, while in other marketplaces creator fees are “simply not paid at all.”

The CEO of OpenSea announced the launch of a new tool in the marketplace that will enable creators to deliver “on-chain enforcement” of their royalties.

The tool, which Finzer called a “simple code snippet,” enables creators to impose royalties on present and past NFT collection smart contracts as well as upgradeable smart contracts that have already been created.

Additionally, the code will limit the sale of NFT to only those marketplaces that impose creator fees.

“It’s clear that many creators want the ability to enforce fees on-chain; and fundamentally, we believe that the choice should be theirs to make — it shouldn’t be a decision made for them by marketplaces,” Finzer said.

Finzer added that while OpenSea will use an on-chain enforcement tool to enforce royalties for new collections, it won’t do so for new collections that don’t opt-in.

OpenSea is “not forcing people to use our specific solution,” according to Finzer in an accompanying Twitter Spaces. Instead, creators are free to use “whatever solution you want and implement it anyway,” he added.

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“We provide a template GitHub repo that helps you use a solution that basically blocks lists marketplace that doesn’t support creator fees, you don’t have to use that solution; the requirement is that if you want creator fees, you have to enforce them on chain.”

Due to implementation difficulties, the tool won’t be made available for the time being for NFT collections that already exist.

“To the best of our knowledge, the only way to achieve on-chain creator fee enforcement for existing collections with non-upgradeable smart contracts is to take drastic measures with their communities, like shifting the canonical collection to a new smart contract,” Finzer said.

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“In our opinion, by far the better option is for existing creators to explore new forms of monetization and alternative ways of incentivizing buyers and sellers to pay creator fees, and to ensure that future collections enforce creator fees on-chain,” he added.

Finzer suggests options like allowing optional creator fees, continuing to enforce off-chain fees for some subsets of collections. And working together on additional on-chain enforcement options for creators.

There has been a range of responses from the Twitter community and NFT creator.

While “I don’t fundamentally agree with the removal of royalties, I do appreciate this execution,”

Wab.eth, creator of the Sappy Seals NFT collection and co-founder of The Pixlverse and Pixl Labs, said to their nearly 60,000 followers.

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Other users also had queries that they thought needed clarification.

However, iexclusivenews Nigeria reports that one of the Deadfellaz NFT collection’s creators, going by the alias Betty, said to their 89,000 followers that;

“It feels like there is no plan and no clear answers were given in regards to existing collections & artist’s royalties” in a post.

The statement “I look forward to reading more concrete communication from them soon in regards to proposed strategies” was added later.