Multiple reports confirm that Yuga Labs, the visionary minds behind the Bored Ape Yacht Club (BAYC), have temporarily suspended support for transactions from OpenSea, one of the foremost NFT marketplaces. The firm’s decision stems from OpenSea’s impending removal of the Operator Filter feature, which facilitated on-chain royalty benefits.
Yuga Labs’ Response To OpenSea’s Policy Changes
Introduced in November 2022, the Operator Filter proved instrumental in enabling creators to have control over their work. For instance, this tool allowed creators to specify that secondary sales of their NFTs could only transpire on platforms committed to enforcing creator royalties.
Consequently, platforms like Blur, which didn’t uphold royalty payments, were excluded from the equation. However, OpenSea recently announced its plans to sunset the Operator Filter by the close of August 2023, leading to heated debates with the NFT creator communities.
Meanwhile, OpenSea’s reasons for this decision included a shortage of comprehensive adoption, platforms devising ways to bypass the filter, and a degree of resistance from the creators. Barely 24 hours after OpenSea’s announcement, Yuga Labs’ CEO, Daniel Alegre, tweeted that the NFT platform would gradually reduce their reliance on OpenSea’s popular smart contract (the SeaPort marketplace tool).
Alegre’s added that Yuga Labs will start discontinuing support for OpenSea’s SeaPort for existing upgradable contracts and future collections and will complete this transition by February 2024. Alegre emphasized the NFT marketplace’s decision no longer aligns with the core ethos of Yuga Labs: to champion safeguarding creator royalties, ensuring that creators receive the rightful compensation for their artistic endeavors.
Meanwhile, the announcement generated a wave of support from the BAYC community. Influential figures within the NFT realm, such as EllioTrades, Alex Becker, and @dotta, also lauded Yuga Labs’ decision.
@dotta is the chief executive of the Forgotten Runes Wizards Cult NFT project. @dotta highlighted the potency of creators’ collaborative efforts to encourage the adoption of royalty-paying marketplaces, suggesting that Yuga Labs’ move is the catalyst for this transformation.
Interestingly, Luca Netz, the CEO of the Pudgy Penguins NFT project, hinted at his firm’s possibility of following in Yuga Labs’ footsteps.
The Division Over Creator Royalties
The discourse surrounding creator royalties has created division within the NFT community over the past 12 months. Enforcing creator royalties was a universally embraced practice during the initial stages of the NFT boom of 2021.
However, the landscape shifted when platforms like Blur became prominent in October 2022. These platforms attracted a significant market share by offering zero trading fees and an optional creator royalty payment structure.
Consequently, other NFT platforms started adopting similar steps, with some reducing their trading fees significantly and increasing royalty percentages for creators. Presently, the NFT community is divided between proponents of the cost-effective trading model propagated by platforms like Blur and others who vehemently champion the need for equitable royalty payments to creators.
The community’s divisiveness on creator royalties underscores the dynamic nature of this domain, where innovation and the artists’ voices combine to shape the path ahead. As Yuga Labs continues to implement its decision, players in the NFT marketplace watch, learn and contemplate their next steps in this unfolding narrative.
Meanwhile, DappRadar data shows that transaction volume on the OpenSea marketplace has decreased by nearly 26% in the last 24 hours.
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