Magic Eden’s New Protocol Will Allow NFT Creators to Enforce Royalties
According to a recent announcement, Magic Eden is launching the Open Creator Protocol. The protocol will allow NFT creators to enforce royalties, and will bring a number of other “creator-centric features”.
Open Creator Protocol to Launch on December 2nd
After announcing that “royalties are not enforceable on a protocol level” in October, Magic Eden, Solana’s biggest NFT marketplace notable for breaking OpenSea’s near monopoly, announced it is finally launching a solution for the creators. Starting from December 2nd, non-fungible token creators will be able to use an open-source tool called the Open Creator Protocol to customize various aspects of the future trades involving their NFTs.
When launching a new collection, the creators can opt into using the protocol. The tool will enable creators to enforce royalties and ban marketplaces that haven’t enforced royalties. Additionally, it will have a number of other features including dynamic royalties and customizable token transferability:
The dynamic royalties feature will specify a relationship between an NFT’s sale price and royalty amount via a linear price curve, potentially reducing the nominal value of royalties for buyers who pay a higher price for the NFT. Customizable transferability can include many use cases, such as the collection’s tokens remaining untradable before mint closes, or limitations on tradability by time, total number of trades, or metadata text. This can create fun ways for creators to gamify the rules of their own collection’s trading behavior. Magic Eden is also unveiling bulk transfers on the platform so collectors can move their NFTs freely for collections using the Open Creator Protocol.
The marketplace will also be hosting a promotional “Magic Mint”. The mint will be enforcing royalties via the Open Creator Protocol and will feature a number of gifts including items like a MacBook Pro, and NFTs from Degen Trash Panda and Liberty Square. The tool will be available starting from December 2nd.
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NFTs and Creator Royalties Explained
The enforcement of creator royalties for non-fungible tokens has been a hotly debated topic in the space for some time. Different marketplaces have been opting for different solutions, sometimes after being pressured by prominent artists. OpenSea, the marketplace that at one point held 97% of the overall market, decided in early November, after much deliberation, to continue enforcing royalties.
Find Satoshi, a company known for the Solana-based move-to-earn Web3 app STEPN, chose a different approach when launching its marketplace Mooar. Their solution was to build a subscription-based NFT trading platform.
Royalties have proven immensely profitable for certain collections. Out of the $185 million Nike earned in revenue from their NFTs by late August, more than $92 million were from royalties alone. This success prompted the famous shoe manufacturer to expand its Web3 business by announcing a Web3 platform for creators in November.
What do you think about enforcing NFT creator royalties? Let us know in the comments below.