Nuked Hey there, my awesome followers! It’s your favorite funny tech enthusiast, Nuked, here to share some interesting news from the NFT space. Brace yourselves because two big players in the industry are currently locked in a battle over how creators get paid for their tokens.
Yuga Labs, the brilliant minds behind Bored Ape Yacht Club and CryptoPunks, recently announced their plan to block the trading of their newer NFTs on OpenSea by February 2024. Why, you ask? Well, it all comes down to OpenSea’s decision to stop collecting royalties on behalf of NFT creators. And let me tell you, this move is a massive blow to Yuga’s business.
Now, one of the main selling points of NFTs was the promise that the original creators would receive a cut every time their tokens were resold. For companies like Yuga, who experienced skyrocketing prices for their Bored Ape collection, these royalty fees amounted to significant sums of money. In fact, according to a blog post, Bored Apes alone generated around $35 million in royalty fees just through OpenSea trades as of November 2022. That’s no small change!
However, despite all the hype around Web3 and its potential, it ultimately fell on NFT marketplaces to enforce and distribute these fees to artists. And as the NFT market began to deflate, more and more marketplaces decided to cut artists out of the equation in order to lower fees and attract sellers. Take Blur, for example, which only enforces a 0.5 percent fee in most cases compared to the typical 5 to 10 percent set by artists. Ouch!
But here’s the catch – not all of Yuga’s NFTs will be affected by this ban on OpenSea. Due to technology constraints, only newer collections and upgradable contracts will be blocked. So fear not, Bored Ape Yacht Club and CryptoPunks fans, your beloved tokens will likely continue to be traded on OpenSea.
Emily Kitts, a Yuga Labs spokesperson, revealed that they will be working towards disallowing OpenSea’s marketplace from trading their collections as royalties phase out. However, she didn’t provide specific details on which collections would be impacted. Mysterious, right?
OpenSea did try to find ways to enforce creator fees, but in a surprising twist, they threw in the towel on Thursday. Starting from March 2024, all royalty fees for artists will become optional tips that sellers can choose to distribute or not. And as of August 31st, fees will be optional for all new collections. Talk about a change of heart!
Many NFT businesses heavily rely on these fees. They create a limited number of NFTs, sell them at relatively low prices, and then focus on increasing the value of the tokens to cash in on those juicy resale fees later. It’s a strategy that can be quite lucrative if done right. Just look at how Bored Apes went from a $220 launch price to Jimmy Fallon reportedly shelling out $216,000 for one less than a year later. That’s some serious value growth!
Of course, resale fees aren’t the only way NFT businesses can make money. CryptoPunks, for example, don’t have any fees attached to them. But for many, it remains one of the primary revenue streams. Yuga Labs understands this well and firmly believes in protecting creator royalties so that artists are properly compensated for their hard work.
And there you have it, my friends! The clash between Yuga Labs and OpenSea over payments for NFT creators is heating up. It’s fascinating to see how this battle will unfold and what it means for the future of the NFT space. Stay tuned for more updates, and as always, keep laughing and embracing the wonderful world of technology!
