The largest NFT marketplace is shutting down a feature that enforces mandatory royalty terms for reselling tokens. This news has sparked outrage from artists and investors. The creators of the largest NFT collection, Bored Ape Yacht Club (BAYC), announced they would be dropping the marketplace’s services in light of the change.
Late last week, Devin Finzer, Founder and CEO of OpenSea, the biggest NFT marketplace, announced that the platform would no longer support Operator Filter, a royalty enforcement tool.
The feature was introduced in November 2022 and enabled the resale of NFTs only on platforms that guaranteed payment of commissions to the author. According to Finzer, the tool lacked the necessary support in the NFT ecosystem, and platforms such as Blur, Dew, and LooksRare bypassed Operator Filter by integrating the Seaport protocol.
Starting August 31, 2023, Operator Filter will be deactivated. However, collections that use the tool outside the Ethereum network will be automatically charged the necessary royalties until February 29, 2024.
The news caused disapproval from the crypto community and NFT artists who were interested in the tool. Mark Cuban, a billionaire and NFT investor, said that OpenSea’s decision would weaken confidence not only in the marketplace itself, but in the industry as a whole. Digital collectors, on the other hand, called for support for those platforms that, unlike OpenSea, would continue royalty enforcement.
The most tangible consequence for the marketplace may be the loss of a major content provider. The decision to leave the platform was announced by Daniel Alegre, CEO of Yuga Labs. He said that the company would gradually cease using OpenSea, and by February 2024, there wouldn’t be a single token from the Bored Ape collections left on the marketplace.
Yuga Labs’ stance has been well received in the BAYC community and also gained support from content creators and NFT project founders. The NFT community believes that Yuga Labs’ decision will ignite the spark needed to make royalty principles mandatory without Operator Filter, as representatives of some NFT projects have hinted that they’re ready to follow Yuga Labs’ example.
OpenSea has recently experienced considerable pressure from competitors, having lost its leading position in the industry.
