Billionaire investor Mark Cuban criticized OpenSea’s decision to make royalty payments on non-fungible tokens (NFT) optional, describing it as a “BIG MISTAKE” that would hurt the industry and reduce confidence, according to a tweet from August 18.
NFT Royalties
On August 17 OpenSea stated it would stop enforcing creator royalties on secondary sales by the end of this month.
Usually, NFT makers receive royalties on every sale of their assets on platforms such as OpenSea. These royalties, capped at 10% on OpenSea, vary by marketplace; For example, LooksRare and SudoSwap allow creators to choose their royalty model.
The market decision to make royalties voluntary came after it lost market share to competitors like Blur, which introduced optional royalty payments and other trading incentives to attract more users to its platform.
OpenSea’s NFT trading volume fell to less than 25% from a peak of more than 90% within a year, according to Dune analytics data. The market is trying to regain dominance by taking new measures to attract more users.
Cuban pleads for royalties
Cuban described OpenSea’s latest royalty decision as one in despair move, arguing it was wrong.
In his display, the biggest issue was enforcing royalties across all NFT marketplaces, which should be resolved. But he disagreed that optional royalties were the way to go.
“The optional royalty approach kills future applications well beyond collectibles. That’s where most of the money will be,” he added.
Cuban is an investor in OpenSea.
Meanwhile, some users pointed out that OpenSea had no choice if it wanted to maintain its relevance in the industry.
Sheetfu, the CDO of the dominant NFT marketplace on the Solana (SOL) network MagicEden, believed this wasis a problem with the technology and that is the solution should be at the protocol level. According to him, creators should be able to use different ways to enforce royalties.