October 19, 2022
By Anjali Kochhar
Solana-based Following X2Y2 in August, Magic Eden has grudgingly become the most recent NFT marketplace to switch to an optional royalty model, according to a report by Cointelegraph.
According to Cointelegraph, buyers can choose the amount of royalties they want to contribute to an NFT project under the optional royalties model, which raises the possibility that some creators won’t be compensated for the sale of their works.
The NFT marketplace stated in a post that the choice was made after “tough consideration and discussions with many authors” and that the “industry has been transitioning towards optional creator royalties for awhile.”
“The market has been shifting towards optional creator royalties for awhile. These charts shows the cumulative wallets that have used optional royalty marketplaces to buy or sell NFTs,” Magic Eden said in a Tweet on Oct. 15.
However, the decision has generated conflicting reactions from Twitter’s NFT community. While some of the crypto enthusiasts see it as advantageous for the industry’s long-term health, others have compared bypassing payments to “stealing.”
Despite not liking what Magic Eden and others are doing, well-known NFT artist Mike “Beeple” Winkleman pointed out to his 700,000 followers on October 15 that the shift from a seller’s fee to a buyer’s premium would be better for the business overall.
“while I am obviously pro-royalties and don’t love what @MagicEden and others are doing, I do think there is one key change that they hit on… switching from a sellers FEE, to a buyer’s PREMIUM. i think this is actually much more sustainable long term…” Beeple said in a tweet.
Brocolli DAO said that “royalties are needed in an immature ecosystem,” noting that as per their calculations, they’ve already lost as much as $27,000 in royalties due to 0% purchases on other marketplaces.
“After Magic Eden’s announcement that they will be making royalties optional, we have taken proactive measures to protect the integrity of our project. We’ve run analytics and determined how much we’ve lost in royalties to 0% purchases on other marketplaces,” Broccoli DAO said.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.