A few days ago, Opensea, the world’s most popular NFT market aggregator for buying and selling digital arts and collectibles, announced a zero platform fee and a 0.5% creator’s fee on all collections old and new on its marketplace.
This is coming after the newly created NFT platform, BLUR, has been trending in trading volumes and market traction. Opensea in the past charged 2.5% fees on all transactions and creator’s set royalties as they so desired.
Creators Fees and Royalties have been an intense topic in the NFT space with some NFT Marketplaces like x2y2 and Blur are currently running a zero fee NFT marketplace. Blur, which launched in November of last year has made it possible for buyers to decide or set creators fees at desired rate, many flipper and degen traders have leverage on this imprint— meaning you don’t have to pay an extra box before buying or trading NFTs on their platform.
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Blur is at an advantage due to the recent $BLUR Airdrop to those who bidded on NFTs, many degenerates got a minimum of 1323 Blur Tokens, currently $1,800 as a thank you bonus for trading on their platform. This new bidding paradigm of Blur for airdrop farming is driving degens to the marketplace.
The war on NFT exchanges is becoming interesting with Opensea updating its policies and Blur topping the daily NFT trading volumes since last week Friday. Blur moves to 0% fees; Opensea blocks Blur, Blur blocks Opensea; Opensea moves to 0% fees for you — sounds good right? Maybe not.
With all marketplaces now using 0% royalties to gain market share, projects’ only income stream will be cut off. Royalties were the only thing keeping many NFTs alive, NFTs backed by VCs and corporations will become the norm.
More project-owned marketplaces
This was already true for gaming ecosystems but will also be implemented by the largest names in NFTs. Want to trade Yuga assets? Sure, but only on their marketplace with enforced royalties. For projects that are pre-mint they know they won’t receive any money after the initial raise. The solution— Reserving 5 to 20% of the supply to sell on a weekly/monthly basis.
Blur took over the market because of low fees AND token incentives. Marketplaces won’t be valued by their revenue but by market share:
• Binance has cashback
• Credit cards give you % kickback
The marketplace war will get a lot uglier.
According to Crypto data analyst, NFTStatistics.eth opines that, “the average royalty across Ethereum NFT marketplaces had gone from 5% to 2.3% since the summer. Got as low as 1.7% and the only reason it was brought higher was Sewer Passes blocking Blur. With Blur’s work-around, the the average went back lower.
The real move in royalty rate happened when Blur launched. To me that was really when this move happened. OS tried to use their exchange block to protect royalties but when Blur got around it, Opensea lost all leverage in protecting royalties. $Blur traders will be automatically disqualified from getting any future Opensea airdrop, the war for top marketplace continues. Opensea did a great mistake in the last year’s by not incorporating OpenDao $SOS as it incentives (airdrop) imprint to the NFT Community after much appeal from 9x9x9eth.
New projects which can block exchanges will STILL be able to enforce royalties. A lot of folks seem to not realize this. Anyone who blocks LooksRare and SUDO will have royalties enforced on OpenSea, Blur, and x2y2 (til someone builds another workaround that gets liquidity).
Art Blocks were not tradable on Blur but Friendship Bracelets and PACE Art Blocks were. So was Brain Drops. Those royalty rates were starting to be affected but remained high. Buyers were still opting for OpenSea. Will be interesting to see how royalties evolve.
Many artists and founders are not really down with the new OpenSea policy on royalties. FrankDeGods, creator at DeGodsNFT and Y00Ts said on microblogging platform Twitter that;
The creators make products that can be traded on marketplaces. The marketplaces make features that attract users to buy/sell on their platform. The users decide what marketplaces they buy/sell on. The users dictate the direction of the market. They always have and always will.
Before someone mentions how creators generate the demand… I 100% agree that we do. But we could have made a regular startup, sold art in traditional ways, but we chose crypto/NFTs. The thing that makes NFTs inherently unique is the ability for marketplaces to aggregate and enable trading on these digital goods.
Opensea Press Release
There’s been a massive shift in the NFT ecosystem. In October, we started to see meaningful volume and users move to NFT marketplaces that don’t fully enforce creator earnings. Today, that shift has accelerated dramatically despite our best efforts. We’ve worked to defend creator earnings on ALL collections when others didn’t. And when we introduced the Operator Filter, it was our belief that on-chain enforcement was the best way for creators to secure their revenue stream from the ongoing resale of their work.
We’re making some big changes
1) OpenSea fee ? 0% for a limited time
2) Moving to optional creator earnings (0.5% min) for all collections without on-chain enforcement (old and new)
3) Marketplaces with the same policies will not be blocked by the operator filter.
We thought we could catalyze widespread enforcement of creator earnings, and we hoped others might come up with more resilient solutions – this hasn’t happened. Recent events – including Blur’s decision to roll back creator earnings (even on filtered collections) and the false choice they’re forcing creators to make between liquidity on Blur or OpenSea – prove that our attempts are not working.
Today, ~80% of total ecosystem volume does not pay full creator earnings, and the majority of volume (even accounting for inorganic activity) has moved to a zero-fee environment.
While we continue to uphold on-chain enforcement through the operator filter, we’re moving to a different fee structure that reflects the needs of today’s ecosystem. First and foremost – We’re dropping our OpenSea fee to 0% for a promotional period of time. Second – We’re moving to a minimum 0.5% creator earnings model, with the option for sellers to pay more. This applies to all collections that do not use on-chain enforcement (old and new). Third – We’re updating the operator filter to allow sales using NFT marketplaces with the same policies (including Blur, as they make good on their promise). Now, creators won’t have to make the false choice between receiving earnings on OpenSea or Blur.