NFT behemoth Yuga Labs announced that it plans to withdraw its support of those platforms that do not enforce creator royalties, claiming that “royalties are the lifeline that keeps creators building fun, weird, and innovative activations in the space. This meant Yuga Labs collections with royalty filters at the protocol level could only be traded on marketplaces. The newly launched Magic Eden Ethereum marketplace is slated to be the first major marketplace to partner with creators and will go live tomorrow.
According to the announcement post, the soon-to-be-launched platform will have tailored sections for collectors, loyalty rewards, and contractual loyalty enforcement. However, Yuga Labs’s most popular collections, like BAYC and CryptoPunks, are excluded, sparking reactions from the community. Some users questioned why royalties were not immutably baked into contracts in the first place.
Royalties were meant for ARTISTS, not mega corps trying to be like Disney. While I applaud MagicEden and their vampiring, I do not applaud yuga in any fashion being the spearhead of something that was meant for the little guy.
For those new, NFT royalties are a pre-set percentage of the sale price given to the original creator of an NFT. They can be specified in the smart contract on the blockchain network or negotiated with buyers upon the initial sale. The concept has yielded mixed results.
Prominent NFT marketplace OpenSea deactivated its royalty feature Operator Filter last year. According to a blog post penned by the founder and CEO, Devin Finzer, the shift towards optional creator fees aims to incorporate the essence of choice and ownership, catering to the preferences of both creators and collectors.
Yuga Labs and Open Sea: Divergent Paths
Since its introduction in November 2022, the Operator Filter has been hailed as empowering creators with increased control over their web3 business models. However, the feature fell short of its goals, Finzer noted. Certain web3 marketplaces, such as Blur, Dew, and LooksRare, strategically circumvented the Operator Filter to evade enforcing creator fees on their platforms, he wrote.
Additionally, some creators found the Operator Filter restrictive, limiting their control over collections’ sales—which goes against the ideals of decentralized ownership. “So, we are giving collectors more flexibility and choice on creator fees,” Finzer stated.