OpenSea Bolsters NFT Platform With ERC-721C Support for Royalty Enforcement
Summary:
OpenSea, a prominent NFT trading platform, now supports ERC-721C, a token standard allowing creators to implement royalties. Before this, traders could avoid paying royalties on secondary markets by moving NFTs through personal wallets or other platforms. With an upgrade in Ethereum network, compatibility for ERC-721C was made possible, which would help combat such issues. This feature also aligns with OpenSea's Seaport 1.6, which programs NFTs for sale under certain conditions. NFT royalties generally stand at 2.5% to 10% per sale and the top ten NFT collections have amassed over $345 million in royalties since their start.
OpenSea, a popular trading platform for nonfungible tokens (NFTs), has now adopted the ERC-721C token standard, enabling creators to establish and impose royalties. As of their April 2nd announcement, OpenSea artists can simply click to mandate their profits. The ERC-721C, created by blockchain gaming enterprise Limit Break in May of last year, addresses NFT wash trading issues by consistently applying conditions like royalties across all trading platforms. Prior to this, NFT users could effortlessly evade artist royalties on secondary markets, such as OpenSea and Blur, by shifting NFTs via their own personal storage wallets or other NFT marketplaces that disregarded an artist's royalty stipulations.
According to Limit Break's Medium post, "This led to encouraging no-fee, optional royalty trading through airdrops over time, essentially converting non-fungible tokens into equivalents for fungible tokens," and they further added that "traders were incited to yield tokens by engaging in wash trading among their personal wallets, posing a threat to the NFT market."
OpenSea developers reveal that only with the Dencun upgrade to the Ethereum network on March 13th was compatibility for ERC-721C made possible. OpenSea stated, "By following the steps to enforce your creator royalties, sales will only be recognized on OpenSea and other markets powered by Limit Break's Payment Processor." After deploying the ERC-721C contract on OpenSea, artists can manually advertise their digital jewelry on alternative markets; however, OpenSea will match the minimal royalties set by the artist on other platforms.
This new attribute is also congruent with OpenSea's Seaport 1.6, which conditions NFTs for sale only if certain conditions, like a response to sales volume through metadata alterations, are met. NFT royalties, usually decided by the creator, generally fall within 2.5% to 10% per transaction. So far, the top 10 NFT collections have generated over $345 million in royalties since their establishment.
Published At
4/2/2024 10:30:12 PM
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