#154 - Opensea chooses the dark side

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Today,

• Opensea royalty changes: a summary

• Pixel Vault could soon own Yuga Lab's rarest NFT

Top 24 hr collection volume

via CoinMarketCap

1. MAYC - 668 sales earning 10,856.56 ETH (0.01%)

2. Moonbirds - 1,042 sales earning 7,204.74 ETH (0.06%)

3. Clone X - 807 sales earning 4,352.56 ETH (0.03%)

4. BAYC - 50 sales earning 3,881.6 ETH (0.01%)

5. Azuki - 226 sales earning 3,445.15 ETH (0.00%)

Begun, the marketplace wars have

Just before the weekend, Opensea did a big U-turn on its stance around creator royalties.

(Also known as creator fees / earnings / artist pocket money / trickledown tokenomics)

Instead of enforcing the individual royalty terms set by NFT creators, Opensea will now only enforce the first 0.5% of a collection's royalty request.

That means Opensea users can choose whether to pay higher requested royalties on any project that doesn’t use on-chain royalty enforcement (most pre-2023 collections).

It’s a complete shift in Opensea’s stance. They went from holding the royalty moral line to embracing the dark side of market dynamics.

So why’d they do it?

#1 The market has spoken ...and it doesn't like royalties

Since the appearance of royalty-optional NFT marketplaces last year, the number of traders respecting creator royalty requests has only decreased.

Which left Opensea in the awkward position of taking a stance against the majority of its users.

They got stuck trying to balance the needs of pro-royalty creators and anti-royalty traders, who were fast leaving the site for competitor marketplaces.

Over the past couple of months, that competition has won out decisively.

As Opensea strayed from market demands, introducing features like its Operator Filter in attempts to protect creator fees, newer marketplace Blur has dominated by giving traders what they want – no fees and no requirement to honor full royalties.

#2 Blur has waged absolute war on Opensea

Blur has steadily gained market share thanks to its zero fees and royalty structure – and its $BLUR airdrops, which reward users with magic internet money in return for buying, selling, and bidding on the platform.

Blur is now regularly home to 80% of daily NFT activity, and sales data shows that all major collections do bigger transaction volumes on Blur than Opensea.

(even if Blur's numbers are significantly pumped by its rewards program.)

As part of Friday's changes, Opensea announced a promotional period where it will temporarily eliminate its 2.5% fee on sales, effectively matching Blur's no-fee model for a limited time.

So who benefits from the marketplace wars?

• Traders – Blur and Opensea's main customers

It's now clear that the two biggest NFT marketplaces are both 100% focused on the buyer, not the creator.

Good news for people who trade NFTs to make money, not to enjoy them or support artists. 

Will we ever see an $OS airdrop? ...don't count it out.

• New projects – that use on-chain royalty enforcement

Here's a key point: if a project is built with on-chain royalty enforcement, it can still collect full royalties on Opensea.

And with OS now saying its Operator Filter won't block "marketplaces with the same policies," these projects can be freely listed across Blur and Opensea.

And who loses?

• Art platforms with royalty models

Art curation platforms, such as the increasingly popular Braindrops, use royalty-based business models that encourage "collectors and artists to grow together."

Without secondary royalties to compensate artists when their work grows in value, these platforms could be forced to raise the initial price of new collections.

• The little guy

Likewise, royalties give unknown artists and projects a way to start small and grow.

Now, these builders will need to invest in more complex on-chain contracts if they want to offset their potential value, protect royalties, and enter the market at a lower price.

Tweet of the day

Covered in tomorrow's Decentra Daily...

On the web3 wire

PROOF cancels conference ❌The media studio behind Moonbirds says that "sales data and conversations with sponsors" resulted in the decision to cancel its flagship IRL event and refund tickets & hotel bookings.

Jeff Koons' dog destroyed at Art Wynwood in Miami 🎈 The smashed $42K piece has already received offers from collectors and effectively burns the number of balloon dogs down to 798.

I’m American, but My Crypto Startup Won’t Be 🤑"Move2Earn" builder Ben Cohen reflects on the increasingly worrying US crypto regulatory landscape in this op-ed.

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The one key to rule them all

It's a degen move that could make Inhabitants' United Planetary DAO (UPDAO) the "center of the Web3 gaming universe," according to proposal creator, Zeekay.

On Friday, he moved that the decentralized community should buy Yuga Lab's Dookey Dash Key.

The key, which unlocks a unique asset within the Bored Ape Yacht Club ecosystem, was awarded to Dookey Dash winner @Mongraal, who promptly listed it on Opensea for a speculative price of 2,222 ETH.

Zeekay's proposal has received unanimous support so far and, if passed tomorrow, will permit the UPDAO to place a 690 ETH bid.

Is that enough cash? Well, the professional gamer has signaled interest in the deal, in a reply to Pixel Vault founder GFunk (who also voted yes on the proposal).

What will the UPDAO use the key for? The proposal doesn't contain specific plans, but with Pixel Vault's own web3 game currently in the works, it would be ironic if the key was once again posted as the bounty for a top score...

Ciao! 👋

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