Magic Eden CEO proposes Royalty Enforcing NFTs
Implementing this new standard will create a new asset class to support those who want royalties.
A New NFT standard
The biggest NFT marketplace on Solana, Magic Eden, contends with the question of creator royalties for NFTs. This happened after a wave of optional-royalty marketplaces ate into its market share. Magic Eden CEO and co-founder Jack Lu, speaking at Solana’s Breakpoint conference in Lisbon, addressed the matter. Jack Lu advocated for a new NFT standard that will enforce royalties at a complex, technological level.
“There is a real opportunity to give rise to a new asset class, Magic Eden has spoken to dozens of creators amongst many, many industries to canvass their opinions. Some folks really want sovereign ownership,[while] some folks really want royalty enforcement or new business models.”
The CEO warned that a new standard for NFTs would have significant trade-offs. However, he added that "royalty enforcing by necessity means that the creator has some level of control.”
Possibilities of a New kind of NFT
Lu elaborated on his comments during the interview at Breakpoint. He said,
"These kind of royalty-enforcing NFTs don’t look like the NFTs we understand today. So the holders will need to give up some level of control or freehold ownership of these NFTs in favour of the creator.”
He further suggested that they might no longer be called NFTs. Instead, they might have a name that reflects their real nature at that time, as NFTs have always been an umbrella term encompassing the likes of wildly different tokens.
The top overall NFT marketplace, OpenSea, created an enforcement tool that allows creators of new projects to block Ethereum marketplaces that do not enforce royalties. The CEO, Devin Finzer, studied other marketplaces where royalty was optional. The study results showed that creators' fees are almost non-existent. Hence, this feature is optional but a matter of choice for creators to subscribe.