(Hypebot) — OpenSea, the largest NFT marketplace, has announced that it will make the collection of promised NFT resale royalties optional.
The ability to collect a 5-10% royalty on future resales was one of the main benefits touted by OpenSea and others who promoted NFTs as a panacea for musicians. That promise of future income was particularly attractive to emerging artists whose value might increase as their careers progressed.
Last year, Warner Music Group partnered with OpenSea to give its priority artists access. “Our collaboration with OpenSea helps to facilitate these [fan] communities by unlocking Web3 tools and resources to build opportunities for artists to establish deeper engagement, access, and ownership,” said Warner’s Chief Digital Office, Oana Ruxandra, in a statement announcing the deal.
Some of those opportunities remain, but the ability to profit from them long term has been severely limited. Starting in March 2024, resale fees promised in the original OpenSea NFT sale agreements will become optional tips that the seller is not obligated to pay.
OpenSea investor Mark Cuban: “It’s desperation.”
Musicians and the NFT creator community are not pleased by the move. Billionaire and OpenSea investor Mark Cuban has become a leading voice for those opposing the change.
“Not collecting and paying royalties on NFT sales is a HUGE mistake by OpenSea. It diminished trust in the platform and hurts the industry,” said Cuban. “The buyer knows what the royalties are before they buy it. The creator can set the royalty to zero. They are part of the smart contract that mints the NFT. It’s not smart. It’s desperation.”
Some smaller marketplaces have said that they will continue to collect royalties but admit to concerns that NFT collectors and investors will favor platforms like OpenSea that do not enforce royalty collection.
Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.
