OpenSea’s decision to disable the tool enforcing royalty collection from August 31 is a major mistake. The statement came from billionaire and NFT marketplace investor Mark Cuban.
The entrepreneur saw in this move a decline in trust for the platform and harm to the industry.
OpenSea unveiled the decision in November 2022. Operator Filter allows creators of collections to blacklist marketplaces that do not charge royalties on the resale of assets.
After August 31, for collections that used the mentioned feature, royalties will be forcibly charged through February 29, 2024. After that date, creator royalties will become optional. For new NFTs this rule will take effect immediately.
According to OpenSea founder and CEO Devin Finzer, the tool did not receive in the ecosystem the level of support the team had hoped for. In his words, a number of marketplaces such as Blur, Dew and LooksRare bypassed Operator Filter by integrating the Seaport protocol.
“The buyer knows the size of the royalty before the deal. The creator can set this parameter to zero. They are part of the smart contract that creates the NFT. This is irrational. This is desperation”, Cuban commented.
In the billionaire’s view, the move will “kill” future dapps that go beyond collectibles, where there will be “the most money”.
OpenSea’s move drew a similar reaction from Yuga Labs. The company plans to end its cooperation with the NFT marketplace by February 2024.
“Yuga Labs will begin the process of removing support for the Seaport protocol for all updated contracts and any new collections by the designated OpenSea deadline”, explained the firm’s CEO Daniel Alegre.
The executive stressed that Yuga Labs believes in protecting creators’ royalties so they receive proper compensation for their work.
Earlier in February 2023, OpenSea moved the marketplace to an optional royalty-collection model and temporarily suspended fees amid a standoff with Blur.
In June, the total royalties paid to NFT-collection creators fell to a two-year low — nearly 1000 ETH.