NFT giants are protesting Blur and OpenSea over royalty rates
Major NFT creators Yuga Labs and Bored Ape Yacht Club reconsider listings on dominant platforms Blur and OpenSea, challenging recent royalty cutbacks.
Major players in the non-fungible token (NFT) space, including Yuga Labs Inc., creators of the Bored Ape Yacht Club and CryptoPunks, along with Pudgy Penguins collection, are reevaluating their partnerships with dominant marketplaces like Blur and OpenSea. Some are either suspending new listings or contemplating such actions, according to reports from Bloomberg.
This year, both Blur and OpenSea have significantly reduced the royalty percentages that creators receive from secondary market transactions, as they aim to boost transaction volumes in the declining NFT market. According to data analytics firm Nansen, royalties in September stood at a modest $2.4 million, a sharp contrast to the January peak of $269 million.
Yuga Labs is not fucking around.
They’ve made it clear that their collections will only be traded on royalty-enforced marketplaces (X2Y2 + SudoSwap V2).
Their latest Mara collection blocks trading on OpenSea, Blur, LooksRare, and SudoSwap V1. pic.twitter.com/J5iav8abvX
— cygaar (@0xCygaar) September 27, 2023
NFT market landscape shifts dramatically
Yuga Labs has taken the initiative to halt trading of its newest NFT collection, Mara, on Blur and OpenSea, stating that only marketplaces that maintain adequate royalties will have the privilege to list their tokens. The company even disclosed job cuts in light of the adverse market conditions.
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Originally, Blur made headway in the market with its competitive low-fee structure, rapidly overtaking OpenSea and forcing the latter to reevaluate its fee policies. As of now, Blur’s base royalty fee is pegged at 0.5%, while OpenSea has transitioned to optional creator fees. Collectively, these platforms are responsible for around 70% of all NFT transactions.
Top 5 NFT marketplaces by weekly trading volume
Amidst the declining royalties, many projects are expanding into different markets, such as gaming or physical collectibles. For example, Pudgy Penguins have diversified into merchandising. This year, product sales have garnered $7 million, starkly contrasting a mere $300,000 earned from NFT royalties.
Today marks the beginning of a new era for products and experiences powered by the blockchain.
Pudgy Toys are not just toys. They are a toy-line licensed directly from our community that gives buyers their first NFTs and Web3 experience. pic.twitter.com/LEzdM8CTUR
— Pudgy Penguins (@pudgypenguins) September 26, 2023
As of now, the premier collections by Yuga Labs and Pudgy Penguins make up an astonishing two-thirds of this year’s NFT trading volumes. Needless to say, potential withdrawal from mainstream platforms will likely have a significant impact on the overall market.