After several months of dealing with the existential threat of zero royalties, NFT artists can finally fight back thanks to Metaplex’s two new asset classes that will enable the enforcement of royalties on-chain. The solution was first rolled out on November 6, 2022, starting with Y00ts.
The main goal is to equip NFT artists with the power to enforce royalties for every transfer.
But what if a user simply wants to transfer their NFT to their other wallets? The new iteration also has an ‘Identity’ feature, which aims to link a collector’s different wallets from each other in order to facilitate self-transfer and eliminate transfer fees (royalty payments) between these linked wallets.
These solutions, which are currently being developed, could be a potential breakthrough, coming from the Metaplex protocol, the Solana blockchain’s NFT standard maker.
Moreover, 99% of Solana NFTs use the Metaplex standard. Artists and projects just need to adopt the new versions that have better control at the protocol level in order to level the playing field between them and marketplaces with an optional royalty fee, as well as collectors that refuse to pay royalties.
Solana’s prime NFT collection, Y00ts, is the first project to jump in and implement this new asset class on its project, with a royalty of
Zero Royalty: Benefiting One Side While Hurting the Other Side
This zero-royalty controversy, one of the biggest problems that the NFT industry has faced, started with Yawww’s announcement of its royalty-adjustment feature. The feature that some collectors have been secretly wishing for was rolled out, but at the expense of thousands of NFT projects and potentially millions of dollars in losses.
This feature works by allowing buyers to adjust the royalty fee they are willing to give to a digital artist. They can either exceed the base royalty fee, lower it, or even set it to zero, which basically means that they won’t be paying the creators for the resale.
It’s an attractive feature for profit-focused NFT collectors as they can save a ton by simply choosing to list on marketplaces that allow it. This forced even the biggest marketplaces like Magic Eden to implement it or lose market share.
Meanwhile, a solution had to be made. There were a few implementations like blurring images for royalty ‘violators’, but these were met with too much flak from the community. Luckily, Metaplex came to the rescue.
When NFT Marketplaces ‘Turns Againts’ Digital Artists
The NFT industry’s heat over the zero-royalty feature didn’t last for too long, as an increasing number of marketplaces soon started to implement their own ‘optional royalty’ features.
Interestingly, even Coral Cube, the marketplace that helped Magic Eden create Metashield, has also jumped into the optional-royalty bandwagon! Furthermore, even Magic Eden itself has also marched into the same path it once denounces.
Solanart, LooksRare, and potentially more to follow, have also made NFT royalties optional for their buyers.
This current trend was quite a surprising development since Yawww announced its controversial feature. Back then, it was tempting to expect marketplaces to band together to eradicate this optional royalty feature, but unfortunately, the exact opposite came into being. Instead of dismantling it, these platforms eventually supported the trend at the expense of NFT artists.
But fortunately, Metaplex would attempt to tip the scales back again to the artists by empowering them through new NFT standards. Whether this solution would ‘flip’ the industry once again or may merely create a shallow dent, only time will tell.
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