The creators of Bored Ape Yacht Club (BAYC), Yuga Labs, will end support for OpenSea following the upcoming removal of the on-chain royalty enforcement tool Operator Filter from the platform.
The operator filter was launched in November 2022, essentially allowing creators to limit the sale of secondary non-fungible tokens to marketplaces that command royalties for creators, filtering out platforms like Blur.
However, OpenSea revealed on August 17 that it will soon be “pausing” the tool at the end of August, citing a lack of “opt-in across the ecosystem” as platforms can bypass the tool and push back from creators.
The following day, Daniel Alegre, CEO of Yuga Labs, shared an announcement via X (Twitter) stating that the company will phase out its use of OpenSea’s Seaport Marketplace Smart Contract:
“Yuga Labs will begin to phase out support for OpenSea’s SeaPort for all upgradable contracts and new collections, with a goal of completion by February 2024, along with OpenSea’s approach.”
“Yuga believes in protecting creator royalties so that creators are properly compensated for their work,” he added.
About @opensea’s decision to discontinue their operator filter. pic.twitter.com/ahc155WWkX
— Yuga Labs (@yugalabs) August 18, 2023
The post received a positive response from members of the BAYC community, while content creators/NFT project founders such as EllioTrades and Alex Becker also praised the move.
The CEO and co-founder of the Forgotten Runes Wizards Cult NFT project @dotta also gave support, noting that they were eager to see how Yuga Labs reacted to OpenSea.
“The creators have enough power in total to move into royalty-paying marketplaces. Yuga leading the attack is the spark that was needed.
Yuga bans OpenSea in light of their choice to stop enforcing creator royalties
You like to see it
As I mentioned yesterday, OpenSea taught us how to filter exchanges with bad behavior by giving us the OperatorFilter registry
Those of us who have implemented it are now planning to…
— dotta (@dotta) August 18, 2023
Notably, Luca Netz, the CEO of the Pudgy Penguins NFT project, also seemed to hint at doing the same as Yuga Labs, as he responded to the company’s post by calling it a “great move.”
In a separate post from Coinbase NFT on Aug. 18, highlighting its “commitment to enforcing royalties for creators,” Netz also stated, “Let’s talk.”
Let’s talk
— Luca Netz (@LucaNetz) August 18, 2023
Divided market
The idea of creator royalties and whether they should be supported/enforced or not has become a divisive topic in the NFT community over the past year.
In the early stages of the NFT boom around 2021, it was common practice to force royalties on creators. Marketplaces like Blur then stormed the market in October 2022 and managed to secure significant market share by offering zero trading fees and an optional royalty payment model for creators.
As a result, trading fees and royalty rates began to drop across the board as marketplaces competed for users.
As it stands, it generally seems that the NFT community is divided between those who favor the cheaper NFT trading model of platforms like Blur, and advocate for different methods of compensation for creators, and those who are staunchly advocating the need to pay royalties.
As it stands, NFT royalties make no sense
– forever due
– payable, even if sold at a loss
-unenforceable without jeopardizing propertyWouldn’t it be better to make them optional and drive compliance while working out other monetization opportunities for artists?
— scribloooor (@scribloooor) August 18, 2023
