Royalties are in danger

There has been an intense battle over royalties in the NFT space

I crunched the data on how much creators have earned from royalties

Here are 3 key insights I found 👇

1/ In 2023, Opensea has paid out 18k ETH in royalties ($31M at today's price)  and Blur has paid out 3.7k ETH ($6.1M at today's price)

2/ The % of trading volume that goes to royalties used to be 5%+ on Opensea

Following their decision to cut enforced royalties to 0.5%, OpenSea's royalty rate has fallen to match Blur's

3/ Here are the NFT collections that have earned the most from royalties in 2023

1. Sewer Pass - 1.7k ETH
2. Otherdeeds - 963 ETH
3. Captainz - 682 ETH
4. The Memes by 6529 - 678 ETH

The latest development in the royalties battle is that OpenSea and Blur have both settled on dropping the minimum royalty on a transaction to 0.5%

They won't enforce the full royalty set by the NFT creator unless the creator designed their contract to block the opposing market

In my opinion, this is bullshit

Royalties matter

We should be trying to keep them alive

I don't care that there isn't a way to enforce them on-chain

Up until a few months ago, key marketplaces enforced royalties off-chain

That should have stayed the case until better monetization methods for NFT creators were figured out

I don't care that they clash with marketplace growth incentives

Automated royalty enforcement is a large part of what made so many artists and creatives interested in NFTs

That value prop helped launch the 2020s NFT boom

If we kill them to optimize for short-term profit or growth we compromise the long-term potential of NFTs as a creator platform

It's also important to remember the creators who fought to make NFT royalties a standard in the first place

Sparrow, Lawrence Lee, Matt Kane, Alotta Money, Skeenee, Josie, MLIBTY, hexiosis, XCOPY, Giant Swan, Shortcut (unityofmulti), Coldie, bard ionson, oficinasTK, Hackatao, Van, and GISEL X

In 2019, these artists stood together and pushed the marketplaces to enforce royalties

https://mattkane.com/art/advocacy/minimum-10-nft-royalties-letter-to-platforms/

This is what ‘being early’ is about

It's about acknowledging that we have a unique opportunity to shape the future of NFTs, and taking responsibility for demanding change where it is needed

If we don't make long-term decisions

• We lose the opportunity to make NFTs a good creator platform that gets wide adoption
• The NFT space will remain a niche casino that never attracts more active users than an Instagram dogface filter

Sorry about the long rant this week. Been feeling pretty frustrated about this whole mess 😅

To put things in perspective: 53% of Blur's volume comes from just 500 wallets (research by Archmage Hackworth 🧙)

The marketplaces are killing their current profitability (by dropping to 0 fees) and their long-term relationships with creators (by cutting royalties) to compete for 500 pro traders.

Instead of trying to grow the pie of NFT users 🤦

As you can probably tell, I have strong feelings about this issue. If you'd like to help me get my point across you can help by boosting the matching thread on Twitter