OpenSea Reduces Creator Earnings And Offers 0% Trade Fees

February 18, 2023 - Around 3 mins mins to read

Key Points:

As competing marketplaces continue to erode its once-dominant user base, major nonfungible token (NFT) marketplace OpenSea announced a significant restructuring around lower platform fees and higher creator earnings.
OpenSea responded by announcing three significant adjustments in an effort to retain its customers who were migrating. The measures include introducing optional creator earnings, a temporary 0% fee, and leniency for other operators.

As competing marketplaces continue to erode its once-dominant user base, major nonfungible token (NFT) marketplace OpenSea announced a significant restructuring around lower platform fees and higher creator earnings.

OpenSea Reduces Creator Earnings And Offers 0 Trade Fees

Nansen data show that on February 18, NFT marketplace Blur overtook OpenSea in daily Ether trading volume as users seek a trading environment that is advantageous to them in anticipation of higher returns on their NFT investments.

OpenSea responded by announcing three significant adjustments in an effort to retain its customers who were migrating. The measures include introducing optional creator earnings, a temporary 0% fee, and leniency for other operators.

We’re making some big changes today:
1) OpenSea fee → 0% for a limited time
2) Moving to optional creator earnings (0.5% min) for all collections without on-chain enforcement (old & new)
3) Marketplaces with the same policies will not be blocked by the operator filter
— OpenSea (@opensea) February 17, 2023

OpenSea admitted losing users to other “NFT marketplaces that don’t fully enforce creator earnings,” and the new measures are an attempt to revitalize its dominance in the space, adding:

“Recent events – including Blur’s decision to roll back creator earnings (even on filtered collections) and the false choice they’re forcing creators to make between liquidity on Blur or OS– prove that our attempts are not working.”

While reiterating its support for Operator Filter, a feature designed to assist artists in securing their revenue for the resale of their work, OpenSea thinks that it successfully defended creator earnings on all collections. Yet, this filter deliberately disallowed marketplace recommendations that had the same policies.

Blur’s new royalty policy, which highlights the variations in royalty payment alternatives between its platform and OS, can be credited with the company’s dominance in daily trading volume. It said:

“OS’s current royalty policy prevents collections from being able to earn royalties everywhere. They have cited various reasons for this (see FAQ), but the end result is that creators are limited to earning royalties on only one platform at a time.”

Community members emphasized the value of competition in the sector amid the royalty battle between the two marketplaces. Without marketplaces that charge no royalties, more significant companies like OpenSea would eventually raise their prices, which would be detrimental to authors and collectors.

Also, OpenSea intends to keep evaluating the model to see what functions best for the organization and the community. If OpenSea is successful in gathering its lost clients, community members anticipate that it would likely boost its platform fees in the future—a predatory approach frequently observed in markets with less competition.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.

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