- NFT marketplace Magic Eden has activated optional royalties allowing buyers to choose whether or not to tip creators
- The marketplace is following a growing trend in the NFT space
- The move has divided the NFT community with some seeing it as a positive thing while others think it will kill their businesses
NFT marketplace Magic Eden has opened the door for optional royalties allowing NFT buyers to choose whether or not to offer a kickback to an NFT project. Magic Eden has appeared to bow to pressure from similar platforms that have already enabled the feature. However, the NFT community is divided, with some considering the feature a plus for the industry while others see it as a way to rob NFT creators.
Royalties Shouldn’t Exist
Magic Eden published a Twitter thread on the subject, in which it announced the optional royalties feature after engaging creators and observing the general trend in the market:
🧵After some difficult reflection and discussions with many creators, we’ve decided to move to optional royalties on @MagicEden.
Effective later today, we will also begin running a promotion to waive our platform fees.
— Magic Eden 🪄 (@MagicEden) October 15, 2022
With optional royalties, an NFT buyer sets the amount they want to contribute to an NFT project. The feature also gives the buyer the freedom not to tip a project implying that some NFT creators won’t receive royalties each time their creations change hands.
This has divided the NFT community with notable NFT creators like Beeple considering the move “sustainable” in the long run. However, others weren’t so sure:
while I am obviously pro-royalties and don’t love what @MagicEden and others are doing, I do think there is one key change that they hit on… switching from a sellers FEE, to a buyer’s PREMIUM. i think this is actually much more sustainable long term… 🧵
— beeple (@beeple) October 15, 2022
Lack of Royalties will Kill Businesses
Despite support from some popular names in the NFT space, pro-royalties individuals expressed their dissatisfaction with optional royalties. Some argued that tips from secondary NFT sales are needed since the space is “immature.” Broccoli DAO, for example, said that failure to pay royalties would “kill” their business since some of the tips are used to pay salaries:
Now that Magic Eden is doing this, it could kill our project. We rely on royalties to pay a portion of our team salaries.
Therefore, we have partnered with @Simpl3r_BH
to implement their new “Prot3ct” tool.
— Broccoli DAO 🥦 (@Broccoli_DAO) October 15, 2022
Since the pressure to offer optional royalties is only getting real, its effect on creators and marketplace usage is yet to be determined.