Multi chain NFT Marketplace Magic Eden He announced on Saturday that he will start a new job Ethereum In collaboration with the end of the year platform Boring Monkey Boat Club Creator Yuga Labs—firmly committed to honoring creator royalties on NFT sales.
In a statement, the companies said Magic Eden is “contractually obligated” to pay Yuga Labs a share of future secondary market sales of NFT collections.
“We're thrilled to be putting our money where our mouth is,” said Jack Lu, founder and CEO of Magic Eden. Decrypt.
Lu said that Magic Eden's revamped Ethereum marketplace will use a new one. Smart contracts– Contains the power code Decentralized applications (Dapps) – with technical innovations that ensure royalties are paid during secondary market sales.
Technical details will be revealed before the market launch, but Lu confirmed that the standard ERC-721 Ethereum nonfungible token (NFT) standard will be used. NFTs integrated with certain “marketplace contract assets” are subject to royalty payments.
The change will not affect the way merchants interact with Magic Eden, Lu said; For example, know-your-customer (KYC) checks are not self-identifying.
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A Creative royal A small fee is put behind a project by the artist or company and taken from the value of any subsequent NFT sales. Fees typically range from 2.5% to 10% of the sales price, and such fees were initially valued by marketplaces as a way for inventors to benefit long-term from their certified inventions.
But in the year In the second half of 2022, as NFT sales fade, some emerging markets may Merchants pass such creator feesOr pay a smaller amount. Then the main players followed to follow their pace, and the famous marketplace OpenSea finally decided Stop enforcing royalty payments last August Later He has already promised to honor such payments.
Yoga Labs In late 2022, he criticized OpenSea. When he publicly stated that he intended to retire from royalty and Last August, he came out swinging again After the decision is made. BoredApp's creator says it plans to stop supporting OpenSea Marketplace contracts with new sets and contracts that can upgrade those sets.
“Really, this whole ecosystem of Genesis is something we've seen happen with secondary royalties,” said Daniel Alegre, CEO of Yuga Labs. Decrypt. “The gauntlet that accidentally dropped OpenSea made it clear to us that we, as a company at the forefront of the NFT space, need to stand up for content creators.”
Yuga Labs and Magic Eden's press release announcing the news appears to be a subtle dig at OpenSea, stating that the companies “unequivocally confirm that respect for creator royalties is non-negotiable.” On Creative Entrepreneurs”.
“Going forward, for new collections, Yuga Labs will only engage with marketplaces that adhere to these principles, ensuring fair treatment of creators,” the release notes.
Alegre's magical Eden – which it is. In the team working on OMA3 with Yoga Labs (Open Metaverse Alliance of Web3) promises to address any loopholes or solutions with this new technology solution—to improve royalty standards.
And this is not an exclusive deal with Magic Eden. The companies say other marketplaces may choose to use similar contracts entered into through this collaboration, and they hope Yuga Labs will gain widespread acceptance. Additionally, other NFT creators can generate their projects using contracts to receive similar protections.
Conversion strategies
Magic Eden, known for its original iteration on Solanais one of the aforementioned marketplaces. Last year, it switched to alternative royalty payments. After pressure from competitors. The platform as well It launched an Ethereum NFT marketplace last fall.but ultimately took it offline ahead of the planned revival.
Lu admits that Magic Eden has “changes on our own” when it comes to enforcing royalties on Solana, but that he always wants to support creators – just looking for a “technical solution” for that. Such solutions They appeared on Solana Last year, and now Magic Eden is one of the developers trying to set such standards on Ethereum.
“We want to be on the right side of history here,” Lu said.
Alegre says he's confident that this approach of supporting marketplaces that enforce royalties will work, and that Magic Eden will work to address the technology's shortcomings once it's out in the wild. But Yuga acknowledged another potential way to encourage traders to use such marketplaces: denying futures benefits to those who buy NFTs elsewhere.
Yuga's CEO said the company “provides value to owners who engage in platforms that make the most sense.” Asked if there might be consequences for NFT buyers who don't enforce royalties on Yuga assets from marketplaces, his team replied, “We're still figuring out what that means.”
“Look, if the last business is done on a certain platform, you can imagine situations where we might say that there might not be some benefit to the asset owner of ongoing engagement or ongoing experience,” Alegre explained. But Yuga says it doesn't want to “put pressure on the user” to deal with the problem, as it would be “complicated”.
“The best way is to make sure you're working with the right partner, and drive as much traffic as you can to that partner,” he says of Magic Eden.
That ability to limit benefits and benefits to NFT holders is framed as a potential backup plan for now — a nuclear option if necessary. But Alegre and his team hope Magic Eden's approach will be a solution to tipping creator's royalty enforcement.
“We are confident in Magic Eden's abilities,” said Alegre Decrypt. “Obviously, we're very committed to this partnership, and we have every confidence in Jack and his leadership team. This is the approach we are taking now,” he said.
