If there is any NFT topic that gets a lot of attention these days, it is that of royalties. Historically, royalties were a way that NFT creators could be assured of a sort of passive income even after their creations had been sold. But lately, a number of marketplaces and projects have been changing their stance on royalties. OpenSea, for example, announced that they would be opt-in instead of the default but walked back on its decision after backlash from the community.
The latest development regarding royalties comes from X2Y2, an Ethereum marketplace. Following in the footsteps of platforms like OpenSea, X2Y2 has announced on November 18, 2022, that it will be enforcing royalties on all collections listed on its platform.
X2Y2’s Royalties Stance
In its Twitter thread, X2Y2 noted that it has long held the belief that both the creators and buyers of NFTs had the right to choose whether or not to pay royalties. This, it says, was the philosophy behind its Flexible Royalty feature. This feature previously meant that only certain projects could have their royalties strictly enforced by the marketplace while others like profile picture NFTs could not.
But now, X2Y2 has scrapped this feature and credits a recent decision by OpenSea for this. As it was noted in the thread, since OpenSea launched its OperatorFilter feature, many creators have made use of it. This tool essentially stops assets from being traded on marketplaces that do not enforce royalties.
While the topic of royalties has been a controversial one, many creators are doubling down and refusing to deal with marketplaces that do not honour them. This was a firm stance on OpenSea’s part and something that the thread acknowledged.
“We may have a different view on the best way of handling royalties with OpenSea, yet we respect the code. With OpenSea risking its market share and taking a brave move to defend royalties, they have our respect!” it said.
In that vein, the Flexible Royalty feature has been removed for all new NFTs that use OperatorFilter. As for the existing NFTs, royalties have been enforced by X2Y2 as well. These decisions mean that the marketplace will be giving creators their royalties and is a very firm stance on its part in the ongoing debacle.
The Royalties Debate
For the last few months, there has been a trend towards NFT projects and platforms removing their royalties requirements. After big names like Magic Eden joined the trend, there was fear among some creators that royalties would be a permanent thing of the past.
But as the Bored Ape creators said in a recent blog post, those who are pro-royalty would have to fight for it to remain. And given the backpedalling that both OpenSea and X2Y2 have done, it seems this is working. Creators essentially boycotting platforms that do not protect royalties has been the most effective thing thus far and tools like OperatorFilter have only aided the cause. Needless to say, the royalties debate in the NFT space is far from over.