December 15, 2022
By Sharan Kaur Phillora
Creators selling NFTs on the marketplace OpenSea collectively earned $1.1 billion this year, with 80% allocated to collections outside the top 10 and excluding sponsorship revenue, engagement incentives, and grants. Transactions were analyzed that included a creator fee between Jan. 1 and Nov. 23 and shared in a blog post by Shiva Rajaraman, OpenSea’s VP of product.
Here’s what we know:
This revelation was made in a recent blog post highlighting how royalties unfolded this year. For example, about 80% of this amount comes from NFTs not part of top-10 collections, highlighting the importance of royalties for smaller creators.
Creator fees have been the target this year, with various marketplaces making them optional or removing them to cut consumer costs. In another report, Galaxy Digital researchers Sal Qadir and Gabe Parker also found that NFT creators’ royalty rates on OpenSea—the top overall marketplace by trading volume—have doubled over the past year on average, jumping from a 3% cut of sales to 6%.
While new NFT marketplaces are still popping up regularly, OpenSea still makes up the lion’s share of all NFT resales, according to data from Dune Analytics which states that OpenSea makes up over 80% of all Ethereum NFT marketplace volume.
It should be noted that OpenSea, like many other platforms in the crypto space, has had a complicated year regarding NFT royalties. Initially, the platform enforced them on assets it listed but, following several of its competitors doing the same, announced that it would be scrapping this requirement.
After a backlash from its community, OpenSea not only reinstated royalties but has been at the forefront of championing their protection.
Some marketplaces, such as Solana-focused Magic Eden, said they would follow suit and make paying royalties optional after losing significant market share to rival platforms. “We understand this move has serious implications for the ecosystem,” the marketplace said on Twitter, adding that it hopes “to see new standards that protect royalties” developed.
As the debate surrounding NFT royalties rages on, one thing’s for sure: abandoning royalties means creators would be parting with a substantial source of passive income—and potentially leaving millions on the table.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
