News07 November 2022

OpenSea launches royalty enforcement tool

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At this stage, the royalty enforcement tool only applies to new NFT collections. The team will decide on existing collections later.

Let's start by briefly understanding what royalties are, in case you don't know. For example, you've created an NFT and sold it to someone with storage rights: usually, the rights belong to the buyer, and you get nothing out of it.

But the royalties system allows you to get a passive income every time your NFT is resold. However, you don't own it anymore - the royalties will come directly to your wallet. The amount depends on the percentage of royalties and, of course, the success of your collection. I think we got it.

According to Coingecko, Opensea has a 66% market share in NFT marketplaces. Although the site has remained silent on the royalty and enforcement issue, other marketers have implemented their own strategies over the past few months. 

Enforced royalties will be enforced by the blockchain rather than the marketplace, meaning there is virtually a hundred percent guarantee of payments. After all, smart contracts work like clockwork without unnecessary interference. In contrast, the platform is a more subjective and less secure regulator.

"Obviously, many creators want to be able to enforce deductions on the blockchain; and we think the choice should be up to them - it shouldn't be a decision made for them by the trading floors," said Devin Finzer, CEO of Opensea.

Reaction from the NFT creator community and Twitter users has been mixed. There is no point in listing the accounts because it would take hours. Still, the main charges consist of the lack of a clear implementation plan, as well as the question of whether the royalty should be made compulsory.

After all, before royalties were optional, if you want - thank the author by royalties. If you don't want - well, don't. Although the income of NFT creators was reduced because of it.

In general, nothing will change for the average user, except that NFT can not be sold at other sites that do not support the forced collection of royalties.

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