One of the big promises of NFTs was that the artist who originally made them could get a cut every time their piece was resold. Unfortunately, that’s not the case anymore.
OpenSea, the biggest NFT marketplace still fully enforcing royalty fees, said today that it plans to stop the mandatory collection of resale fees for artists. Starting March 2024, those fees will essentially be tips — an optional percentage of a sale price that sellers can choose to give the original artist. If the seller doesn’t want to hand over any money, that’ll be their choice.
The NFT ecosystem has been on a race to the bottom when it comes to fees. As the market for NFTs collapsed, marketplaces have lowered their own trading fees and stopped enforcing royalty fees in order to attract sellers. Blur, which has overtaken OpenSea as the biggest NFT marketplace by trading volume, only enforces a 0.5 percent fee on most collections, whereas creators typically set their fees at 5 to 10 percent.
OpenSea will stop enforcing royalty fees on all new NFTs starting August 31s. The marketplace will continue enforcing the fees on certain existing collections until March 2024, at which point they’ll become optional on all sales.
Judging by the responses to OpenSea’s X post about the changes, many in the NFT community are not thrilled by this. Critics say it will hurt small artists and undermines creators’ ability to control their relationship with the people who buy their work.
Others, including OpenSea, are trying to frame it as a necessarily, positive change as the marketplace evolves. OpenSea CEO Devin Finzer criticized the fees’ “ineffective, unilateral enforcement” and said that creators will find other ways to monetize their work.
“Our role in this ecosystem is to empower innovation beyond a single use case or business model,” he writes in the blog post announcing that OpenSea will no longer support the ecosystem’s primary business model.