Some NFT marketplaces stop honoring NFT royalties, usually a 5%-10% fee set by the creator and paid by sellers on secondary market sales, rocking the community
Andrew Hayward / Decrypt : Tweets: @opensea and @bobbyhundreds Tweets: @opensea : There's been a lot of discussion over the past few months about business models for NFT creators & whether creator fees ("royalties") are viable. Given our role in the ecosystem, we want to take a thoughtful, principled approach to this topic & to lead w/ solutions. 🧵 @bobbyhundreds : For the next 30 days, @OpenSea will consider whether to cut creator royalties on their marketplace for existing collections. Please speak up and let them know how you feel about this. As you know, creator royalties are art the heart of Web3 and NFTs. This can change everything.
DecryptAndrew Hayward
Context & Ripple Effects
OpenSea is putting its own royalty policy up for review: a 30-day window to decide whether to cut creator fees on existing collections, after rivals X2Y2, Magic Eden, and LooksRare already loosened their royalty structures. The move follows months of debate over whether the 5%-10% secondary-sale fee is a viable business model for creators at all.
The stakes are visible in the data that came later: Nansen tracked creator payouts collapsing from $269M in January 2022 to $4.3M by July 2023 as OpenSea and Blur cut royalty rates, and OpenSea itself eventually made creator fees optional for new collections. This article is the moment the enforcement question went mainstream.
First-order effects
Creators of existing collections face losing their primary recurring revenue stream if OpenSea joins X2Y2, Magic Eden, and LooksRare in not honoring the fee, while sellers on those venues get cheaper exits.
OpenSea is caught between defending the creator covenant that built its brand and matching zero-royalty competitors siphoning trading volume.
Second-order effects
Enforcement becomes the competitive differentiator: OpenSea's decision two days later to keep enforcing royalties is a direct counter-position against the fee-dropping marketplaces, betting creators and collectors will consolidate where the covenant holds.
Collections that lose marketplace-level enforcement are pushed toward technical fixes — on-chain filters and allowlists — turning royalty policy into an arms race between marketplaces and projects.
Third-order effects
If the pattern holds, creator royalties stop being a default and become an opt-in enforced by code rather than marketplace goodwill — which is exactly where OpenSea landed with optional fees for new collections in August 2023.
The economics unwind downstream too: with royalty income gone, marketplaces themselves compete on take rates and scale, a squeeze that shows up in OpenSea's later restructuring and deep staff cuts.
The trend:NFT marketplaces are dismantling creator royalties as an enforceable norm, converting them from a community covenant into an optional, technically enforced feature.
There's been a lot of discussion over the past few months about business models for NFT creators & whether creator fees ("royalties") are viable. Given our role in the ecosystem, we want to take a thoughtful, principled approach to this topic & to lead w/ solutions. 🧵
For the next 30 days, @OpenSea will consider whether to cut creator royalties on their marketplace for existing collections. Please speak up and let them know how you feel about this. As you know, creator royalties are art the heart of Web3 and NFTs. This can change everything.
Brilliant move actually Create a system that makes it easy for new projects to block other platforms that don't enforce creator fees Put pressure on other platforms & wait a month to see what happens Either the competition capitulates or OpenSea gets all future volume https://twi…
whatever happens with NFT royalties, it's important to note that royalties were not the only value proposition for digital artists to create NFTs the ability to create (& sell) a unique digital item and transact with it in a censorship-resistant way is still the core value prop
I AM SO CONFUSED, WHO ARE THE PEOPLE DEMANDING WE REEVALUATE ROYALTIES? I SPEND MY LIFE IN THIS SPACE AND I'VE NEVER HEARD ONE PERSON ARGUE PASSIONATELY TO GET RID OF THEM! I want to grow alongside the creators and teams I invest in, we win together. Hands off royalties. https://…
One of the value propositions of NFTs was that creators could get perpetual royalties on subsequent resales of the NFT. It turns out most NFT marketplaces aren't collecting these royalties and screwing creators who expected this revenue. 😲 https://decrypt.co/...
Hey all! Something we want to be clear about: yes, we're building a tool that allows creators to enforce fees on chain but no one *has* to use it. Creators can use a different tool that prevents their NFTs from being bought and sold on marketplaces that don't enforce creator fees
Royalties debate aside, OpenSea encouraging new collections to blacklist all of its competitors so that NFT traders are forced to continue paying them 2.5% on every sale is the real psyops
My take: PFP royalties are going to zero. This is a stupid move by OS and they're just going to continue losing share. Collectors have all the power in most PFP drops and creators aren't going to construct a royalty barrier as they have enough to overcome already (most fail) http…
Imo the @opensea announcement is a clever reframing of taking existing collections to zero royalties. This will disproportionately fuck over emerging artists and marginalized creators who will need to turn to VC funding. Statistically, over 95% of VC funding goes to men.
Yes @opensea are creating tools to encourage monopoly power. But the other platforms are also rugging creator royalties in an attempt to win market share. Platforms need to accept the consequences of what they did - of course creators would find tools to fight back.