OpenSea Doubles Down on Royalty System for NFTs

In early November, NFT marketplace OpenSea sparked heated debate across the digital assets community with a public rededication to its policy of paying royalties to NFT creators. High-profile creators, including the individuals behind Deadfellaz and Bored Ape Yacht Club, spoke out against the policy, which sets OpenSea at odds with most other NFT platforms, and some cancelled plans for new drops on the marketplace.

Previously, OpenSea had allowed creators to set their own fees on secondary sales, even though those fees can’t be fully enforced on-chain. However, recently, rival platforms have slashed royalties in order to make transactions less expensive for traders, creating difficulties for creators dealing with falling prices and demand.

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To OpenSea’s Co-Founder and Chief Executive Officer Devin Finzer, the level of pushback received came as a surprise. Among the policies that he had expected would be popular with creators was a new tool that would block NFTs from being traded on marketplaces that don’t honor royalties paid to the creators.

“Our goal there was really to start a conversation with creators. And I think we really did, in many ways,” Finzer said in a recent interview. “A lot of people came out super active, wanting to tell us their perspective. In some ways, while it was a mixed reaction, it was actually a really healthy discussion.”