In a bid to address issues of creator royalties within the NFT market, multi-chain NFT marketplace Magic Eden has announced an upcoming Ethereum NFT platform with a unique commitment to ensure creators receive their fair share. This collaboration with Bored Ape Yacht Club creator Yuga Labs aims to set a new standard in the NFT industry.
Enforcing Creator Royalties
Magic Eden is set to launch its Ethereum-based marketplace by the end of the year, and it comes with a distinctive feature. The platform will be "contractually obligated" to pay creator royalties on secondary market sales of future NFT collections. This commitment marks a significant step toward restoring fairness and transparency in the NFT ecosystem.
Magic Eden's CEO, Jack Lu, highlighted the technical innovations the platform will employ to ensure that royalties are automatically paid during secondary market sales. While specific details about these innovations will be revealed later, it's confirmed that the Ethereum standard ERC-721 non-fungible token (NFT) will be utilized. NFTs minted with certain "properties of the marketplace contract" will have royalties enforced.
The Royalties Challenge
In recent times, the NFT space has grappled with challenges related to creator royalties. Some marketplaces began to bypass or reduce these fees, causing a ripple effect across the industry. Even major players like OpenSea decided to stop enforcing royalties, leading to significant backlash from creators and industry figures.
Yuga Labs Takes a Stand
Yuga Labs, the creator of the popular Bored Ape Yacht Club NFT collection, has been a vocal critic of these changes and is now taking a strong stance in favor of creator royalties. The company's CEO, Daniel Alegre, emphasized the importance of protecting content creators in the NFT space and standing up for their rights.
A Clear Message to the Industry
In their joint press release, Yuga Labs and Magic Eden subtly pointed out the industry's lack of consistency in respecting creator royalties. They made it clear that they consider this aspect "non-negotiable" and plan to engage exclusively with marketplaces that uphold these principles. This move sends a powerful message to the NFT market, emphasizing the importance of fair compensation for creators.
What Lies Ahead
Magic Eden and Yuga Labs hope that this collaboration sets a new standard for creator royalties in the NFT space. The new marketplace's approach is expected to provide creators with the assurance that their royalties will be honored, encouraging more creators to participate. While there is a potential "nuclear option" of restricting benefits for NFTs purchased from marketplaces that do not enforce royalties, the primary focus is on creating a fair and equitable environment for all creators.
The partnership between Magic Eden and Yuga Labs marks a significant development in the NFT industry, reflecting the commitment to fair compensation and a thriving creator community. As NFT trading volume shows signs of recovery, this initiative may contribute to a more sustainable and ethical NFT ecosystem.