- OpenSea has revealed that it has embraced the ERC721-C NFT standard created by web3 gaming firm Limit Break
- The standard focuses on creator royalties and wash trading
- OpenSea disclosed that the recent Ethereum upgrade activated the standard’s compatibility
NFT marketplace OpenSea has announced support for the ERC721-C NFT standard that focuses on royalties and wash trading. Created by blockchain gaming firm Limit Break, it allows NFT creators to dictate the amount of kickbacks they wish to receive each time their creations change hands on the secondary market. The standard opens up a debate that once put marketplaces like OpenSea and Blur at odds with Blur telling creators to stop listing their NFTs on OpenSea for them to receive full royalties.
NFTs Become Proxies for Fungible Tokens
Announcing the news, the NFT marketplace also disclosed that it has upgraded its protocol to Seaport v1.6 to “introduce a concept called Seaport Hooks.” The upgrade allows creators to set conditions that govern the transfer of NFTs.
We’re excited to announce that creators can now use ERC721-C from @limitbreak to set and enforce their own creator earnings on OpenSea.
What is ERC721-C? ERC721-C is a standard that enables creators to implement programmable and enforceable creator earnings on-chain. It also… pic.twitter.com/iGAuGsjNid
— OpenSea (@opensea) April 2, 2024
Seaport Hooks are compatible with the ERC721-C standard, further increasing how creators control their creations on the secondary market. According to Limit Break, the lack of an on-chain solution to standardize royalties across NFT marketplaces turned “non-fungible [tokens] into proxies for fungible tokens.”
Limit Break added that the scenario also opened the gate for NFT wash trading. Speaking to Decrypt, OpenSea CEO Devin Finzer said that the arrival of Seaport v1.6 and ERC721-C is part of the marketplace’s mission to re-imagine “the product in a pretty big way.”
NFT Marketplaces Undecided
In 2022, a debate on whether or not to enforce compulsory royalties engulfed the space with respected marketplaces like OpenSea and Magic Eden being undecided on which route to take. Most NFT trading platforms took the optional royalties path while others like OpenSea created a separate tool for creators wishing to enforce mandatory fees.
The debate also drew other players like web3 firm Yuga Labs which choose to enforce compulsory creator fees for their collectibles after disagreeing with OpenSea’s way of handling royalties.
With most marketplaces previously following OpenSea’s cue on royalties, it’s to be seen whether they’ll also embrace the ERC721-C NFT standard.
