The largest NFT marketplace backed down from a plan to collect resale royalties only for new collections that allow creators to make them unsalable on non-compliant marketplaces.
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Top NFT marketplace OpenSea has said it will collect creator royalties for all sales on its platform.
The Ethereum-based marketplace caused an uproar earlier in the week after it announced plans to buck the trend that caused most of its biggest competitors to announce that they would stop collecting the resale royalties most artists attach to their NFT creations — but only for new collections. Those generally amount to 5% to 10% of secondary sales.
The issue has become a battle in the last few months, as new marketplaces that advertised that they would not collect royalties began taking significant market share from more established exchanges. The second-largest marketplace, LooksRare, buckled in October, following No. 3 X2Y2, which announced that paying royalties would be optional in August.
At the time, X2Y2 said that it "100%" agreed that making royalties optional "most definitely shouldn't be the norm. Having said this… we unfortunately need to remain in the space if we want to change things for the better in the long run. This move is NOT our preference!"
OpenSea took a different tack, announcing on Nov. 5 that it was launching a new tool that would let NFT creators add in code that would essentially blacklist the sale of those tokens on exchanges that do not enforce royalties — something it admitted would go against crypto's decentralizing principles.
But, it would only enforce royalties for new collections that used that or similar tools.
"It's clear that many creators want the ability to enforce fees on-chain & we believe that choice should be theirs–not a marketplace's–to make… OpenSea will enforce creator fees only for new collections that use an on-chain enforcement tool such as this one."
That, needless to say, led to howls from creators of existing NFTs, who felt OpenSea's move threw them under the bus.
Among others, the founders of Bored Ape Yacht Club NFT collection went bananas, with Wylie "GordonGoner" Aronow blogging that despite making $35 million in trading fees from BAYC sales:
"OpenSea made its position clear that they intend to move with the rest of the herd and remove creator royalties for legacy collections from their platform while keeping their trading fee the same across the board."
LooksRare had tried to soften the blow by announcing it would turn over one quarter of its 2% trading fee to creators.
On Nov. 9, OpenSea announced its reversal, saying:
"We're at a collective inflection point: if everyone left in this ecosystem who believes that creator fees are important to our future links arms on this, we WILL ensure that fees are durable."
