Newsletter #130
The Effort to Fix NFT Royalties Continues—Will It Succeed?
>>> FOR DAILY UPDATES, FOLLOW LAZY.COM ON X, INSTAGRAM, and THREADS <<<
This week’s featured collector is BrettsCollection
BrettsCollection is a multi-chain collection of NFTs with a focus on Ethereum, NBA Top Shots and Solana. Pretty cool to see the range of NFTs. Check it out at lazy.com/brettscollection
The Effort to Fix NFT Royalties Continues—Will It Succeed?
The Open Metaverse Alliance for Web3 (OMA3), a conglomerate of significant players in the blockchain, NFT, and metaverse communities, recently announced the formation of a specialized working group whose aim is to fix NFT royalties. The goal is to guarantee the enforcement of creator royalties within the NFT ecosystem. Among the participants are notable entities such as Yuga Labs, the force behind the Bored Ape Yacht Club, and Magic Eden, the multi-chain NFT marketplace.
What Happened to Creator Royalties?
Creator royalties are fees, generally ranging from 2.5% to 10%, imposed on the secondary sales of NFTs. These fees are meant to directly benefit the creators, acting as a continuous revenue stream. Though the concept was initially hailed as a cornerstone of the crypto ecosystem, offering artists a level of financial security absent in traditional art markets, its implementation has recently come under threat. Primarily because the downturn in the crypto market has emboldened NFT marketplaces to eliminate creator royalties in a bid to capture market share.
The Larger Stakes: Interoperability and the Metaverse
OMA3 contends that the erosion of creator royalties risks not only the integrity of the NFT space but also jeopardizes the long-sought goal of an interoperable metaverse—a cohesive online environment where user-owned virtual items can migrate freely between platforms. Robby Yung, CEO of Animoca Brands and a co-founder of OMA3, argues that royalties are essential for incentivizing creators to participate in such an open ecosystem. Without them, the communal sharing of content that makes the metaverse concept viable could break down.
Yung acknowledges the pervasive issue of NFT buyers opting for short-term financial gains, often to the detriment of long-term online sustainability. The challenge is to make the community aware of the hidden costs of prioritizing immediate profit over sustainable development. As Yung puts it, "Everything always has a cost. It just may not be self-evident up front."
Composed of key industry players like Animoca, Yuga Labs, Magic Eden, Decentraland, The Sandbox, Alien Worlds, and Upland, the working group will focus on developing universal standards to protect creator royalties across NFT marketplaces. The aim is to formulate and enforce protocols that member companies agree to uphold.
Conclusion
The establishment of OMA3's working group signifies an important juncture in the NFT and metaverse domains. As the sector grapples with how to balance economic viability with ethical and long-term sustainability, the outcomes of this group's efforts may have far-reaching implications for creators, collectors, and the broader digital landscape.
For further details on this new initiative check out the in-depth article in Decrypt.
This week’s poll: Will efforts to guarantee NFT royalties succeed?
We ❤️ Feedback
We would love to hear from you as we continue to build out new features for Lazy! Love the site? Have an idea on how we can improve it? Drop us a line at info@lazy.com