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Why OpenSea Is Sticking With NFT Creator Royalties
CEO Devin Finzer speaks with Decrypt about royalties moves, the response from creators, and X2Y2 following its lead.
As the leading NFT marketplace, OpenSea’s policies carry a lot of weight—and going into November, many creators and collectors alike wondered about the $13.3 billion startup’s stance on creator royalties. But when OpenSea finally spoke out on the issue, its comments only created more questions, prompting backlash from creators.
Devin Finzer, co-founder and CEO of OpenSea, told Decrypt that the firm analyzed market data and spoke with creators ahead of its announcement, and that it hoped to open a dialogue with more of the NFT community. Finzer said that his team was “surprised” by the level of pushback, which he attributed to the “ambiguity of how we were handling existing collections.”
“Our goal there was really to start a conversation with creators. And I think we really did, in many ways,” said Finzer. “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.”
OpenSea had long honored creator-set fees on secondary sales, even though they can’t be fully enforced on-chain. But in recent months, rival platforms have gutted royalties in the name of cheaper transactions for traders, turning the NFT space on its head and throwing a curveball at creators dealing with falling prices and demand.
On November 5, OpenSea said that it was weighing its options and would continue to consult with the NFT community. It also launched a tool that would let creators of new Ethereum NFT projects block marketplaces that don’t fully honor royalties. But for existing projects, OpenSea cited the possibility of making creator fees optional for traders.
That didn’t go over well with many creators. The Bored Ape Yacht Club founders called OpenSea’s plan “not great,” while pseudonymous Deadfellaz co-creator Betty said that the firm’s communication with her was “misleading” and that “facts are not there.” Streetwear brand The Hundreds canceled a planned NFT drop on the platform.
OpenSea planned to make a decision by December 8, but instead acted within a few days. On November 9, the firm said that it would continue to enforce creator royalties on all existing NFT projects, noting in a tweet thread that it heard the community feedback “loud and clear.”