Yuga Labs and Magic Eden Collaborate to Standardize NFT Creator Royalties
Yuga Labs and Magic Eden have teamed up with OMA3 to tackle the issues surrounding royalties, for NFT creators. Their goal is to establish a system that ensures fairness for all creators.
The Current State of NFT Creator Royalties
On October 17 the Open Metaverse Alliance for Web3 (OMA3) announced its plans to form a working group. The main objective of this group is to develop an approach for creator royalties associated with NFTs. OMA3 has identified a problem with the royalty system and emphasized the need for a well-structured and standardized method that guarantees fairness and equal opportunities for all creators.
Furthermore, OMA3 understands the importance of collaboration in addressing this challenge. Given that, the company has also partnered with companies, in the blockchain technology, NFTs and metaverse space. This includes Yuga Labs, known for their Bored Ape Yacht Club project and Magic Eden a multi-chain NFT marketplace.
Understanding the Royalty Dilemma
Creator royalties are essentially fees that creators receive when their NFTs are resold in markets. These charges typically vary from 2.5% to 10% of the price of the NFT. In the past, these fees were considered a part of the world enabling artists to reap long-term benefits from their creations. However, as a bearish trend emerged certain NFT marketplaces started phasing out these fees. This approach, adopted by platforms, like Blur, posed a challenge for leading marketplaces such as OpenSea, which had to adapt in order to stay competitive.
OMA3 views these changes as risks to the integrity of the NFT ecosystem and the wider metaverse. Robby Yung, CEO of Animoca Brands and co-founder of OMA3 stated for Decrypt that “Creator royalties are not just integral to the fairness principle, or respecting the authorship of creators.” Yuga Labs and Magic Eden along with collaborators are now committed to addressing this concern with a shared goal of establishing a Web3 environment that's both inclusive and equitable, for all creators.