The Standardization of Creator Royalties in NFT Marketplaces
The consortium of major Web3 companies, OMA3 (the Open Metaverse Alliance for Web3), has established a working group with the goal of standardizing creator royalties on non-fungible token (NFT) marketplaces. This initiative aims to protect the interests of creators and ensure that they receive appropriate compensation for their work.
Protecting Creator Royalties
In an effort to safeguard creator royalties, the working group intends to develop universal standards that can be implemented across all NFT marketplaces. By doing so, they hope to establish a consistent and transparent system that ensures creators receive their fair share of revenue from secondary sales. This is particularly crucial, as certain marketplaces have started to remove these fees, potentially due to the current downturn in the cryptocurrency market.
An example of this trend is OpenSea, one of the most prominent NFT marketplaces. OpenSea recently announced its decision to retire the Operator Filter for new collections, which had previously been used to enforce creator royalties. However, existing NFT collections will continue to have royalties enforced until February 29, 2024.
The Rise of Blur as the Top NFT Marketplace
As the industry evolves, new players are emerging in the NFT marketplace space. Blur, a relatively new platform, has quickly risen to prominence, surpassing OpenSea in terms of trading volume. With a 24-hour volume of $4.5 million and a 30-day volume of $125 million, Blur has become a force to be reckoned with in the NFT market.
Reacting to OpenSea’s decision, Yuga Labs, the creators of the popular digital collectible project CryptoPunks, also announced their plans to withdraw support for the platform. The commitment to upholding creator royalties is not merely about fairness, but a matter of recognizing and respecting the authorship of creators. Robby Yung, CEO of Animoca Brands, emphasized the importance of creator royalties and their integral role in the ecosystem.
To support these efforts, OMA3’s website lists an NFT working group, led by Wivity co-founder and CEO Alfred Tom. The group’s primary objectives include enhancing the functionality, usability, and security of NFTs, as well as developing specifications and solutions for NFT royalties. Additionally, the group aims to standardize NFT licenses, mitigate fraud associated with NFTs, and recommend best practices for minting, purchasing, and utilizing these digital assets.
To provide context, OMA3 is a decentralized autonomous organization (DAO) comprised of various Web3 metaverse platform creators. Notable members of this consortium are The Sandbox, Animoca Brands, Alien Worlds, Dapper Labs, Decentraland, MetaMetaverse, Space, SuperWorld, Upland, Voxels, Unstoppable Domains, and Wivity. Astea recently joined as the newest member, further strengthening the consortium’s mission to establish a unified system where digital assets, including NFTs, identities, and data, are permissionless, interoperable, and controlled by users rather than platforms.