OpenSea to discontinue on-chain Operator Filter tool that enforces creator royalties

From August 31, the NFT marketplace OpenSea will discontinue the on-chain Operator Filter tool, which enforces creator royalties.

The platform introduced a solution in November 2022. Operator Filter allows creators to blacklist marketplaces that do not charge royalties on the resale of assets.

According to OpenSea founder and CEO Devin Finzer, the tool did not receive the level of ecosystem support the team expected. He said several marketplaces, such as Blur, Dew and LooksRare, circumvented Operator Filter by integrating the Seaport protocol.

The decision also faced pushback from some creators who saw it as an infringement of property rights, limiting trading options for NFTs.

“Unfortunately the ecosystem did not adopt Operator Filter,” Finzer stated.

He noted that most trading volumes continue to shift toward zero royalties for creators.

“Royalties are only one of many revenue streams available to creators in Web3, and our role in this ecosystem is to support innovation beyond a single use case or business model,” said the OpenSea founder.

After August 31, for collections that used Operator Filter, fees will be forcibly charged until February 29, 2024. After this date, creator royalties will be optional. For new NFTs this rule will take effect immediately.

In February the OpenSea team switched the marketplace to an “optional royalty collection” model and temporarily suspended fees amid a standoff with Blur.

As of June, total royalties paid to creators of NFT collections fell to a two-year low — roughly 1,000 ETH.