Major NFT makers Yuga Labs and Bored Ape Yacht Club are reconsidering listings on dominant platforms Blur and OpenSea, disputing recent cuts to royalties.
Major players in the non-fungible token (NFT) space, including Yuga Labs Inc., makers of the Bored Ape Yacht Club and CryptoPunks, along with the Pudgy Penguins collection, are reevaluating their partnerships with dominant marketplaces like Blur and OpenSea. Some are suspending new offerings or considering such actions, according to reports from Bloomberg.
This year, both Blur and OpenSea significantly reduced the royalty rates that creators receive from secondary market transactions as they look to increase transaction volumes in the shrinking NFT market. Royalties in September were a modest $2.4 million, a sharp contrast from January’s peak of $269 million, according to data analytics firm Nansen.
Yuga Labs isn’t working on it.
They have made it clear that their collections will only be traded on royalty-mandated marketplaces (X2Y2 + SudoSwap V2).
Their latest Mara collection blocks trading on OpenSea, Blur, LooksRare and SudoSwap V1. pic.twitter.com/J5iav8abvX
— cygaar (@0xCygaar) September 27, 2023
The NFT market landscape is changing dramatically
Yuga Labs has taken the initiative to halt trading of its latest NFT collection, Mara, on Blur and OpenSea, stating that only marketplaces that retain sufficient royalties will have the privilege to list their tokens. The company even announced job cuts in light of the adverse market conditions.
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Originally, Blur made headway in the market with its competitive, low-fee structure, quickly overtaking OpenSea and forcing the latter to reevaluate its compensation policy. As of now, Blur’s base royalty fee is set at 0.5%, while OpenSea has moved to optional maker fees. Collectively, these platforms are responsible for approximately 70% of all NFT transactions.
Top 5 NFT Marketplaces by Weekly Trading Volume
Amid declining royalties, many projects are expanding into different markets, such as gaming or physical collectibles. For example, Pudgy Penguins have diversified into merchandising. This year, product sales have generated $7 million, which is in stark contrast to just $300,000 earned from NFT royalties.
Today marks the beginning of a new era for products and experiences powered by the blockchain.
Pudgy Toys is not just any toy. It’s a toy line licensed directly from our community, offering buyers their first NFTs and Web3 experience. pic.twitter.com/LEzdM8CTUR
— Pudgy Penguins (@pudgypenguins) September 26, 2023
Currently, the best collections from Yuga Labs and Pudgy Penguins make up an astonishing two-thirds of this year’s NFT trading volumes. Needless to say, a possible withdrawal from mainstream platforms will likely have a significant impact on the overall market.