Has OpenSea solved NFT creator fees?

GM and welcome to Decentra Daily, the web3 newsletter that never leaves you hanging.

It's a new week and our inboxes are already overflowing with announcements, leaks, and controversies – do these web3 folks ever stop?

On this episode of Decentra Daily:

• A solution to NFT creator fees?

• More AI image tools coming our way

• Introducing our latest contributor

OpenSea's new code: a step forward for creator fees?

OpenSea, the world's largest NFT marketplace, has been struggling recently. Sales on the platform have hit a 15-month low.

You could blame the bear market for the low activity. But some analysts also attribute OpenSea's troubles to the recent rise of "royalty-free" marketplaces.

To fee or not to fee?

OpenSea has traditionally supported NFT royalties, now mostly referred to as Creator Fees.

In the early days of the space, adding a creator fee clause into NFT smart contracts was a much-anticipated benefit of blockchain art –giving artists a revenue stream from secondary sales as their work passed between collectors.

But it turns out those collectors, many of whom see NFTs as just another commodity to trade, aren't so keen on the idea of paying a fee every time they want to sell.

To serve that demand, newer marketplaces like X2Y2, Blur.io, and Magic Eden either have their own creator compensation features, or don't require buyers to honor fees at all.

The solution?

With support on both sides of the Creator Fee argument, OpenSea is now attempting to split the difference, with a new optional code that only enforces royalties if applied:

Here’s how it works:

• creators can add a code snippet into NFT contracts, which stops sales on fee-optional marketplaces

• the change only applies to new NFTs

• OpenSea will end universal fee enforcement sometime after December 8

• creators who don't add the code snippet can still sell NFTs across marketplaces:

So, is it a good idea?

Pros

One of the most powerful names in the NFT space is continuing to stand behind creators who believe they should get (and may rely on) revenue from secondary sales.

Cons

You won’t be able to trade any collections using the bespoke OpenSea code on some of the most active marketplaces right now – like blur.io or LooksRare.

That means a percentage of NFTs will be "centralized" on the OpenSea platform.

So you could argue that all of this is just OpenSea trying to block out their fast-increasing competition...

Dall·E now available as an API

Starting yesterday, developers can build apps using OpenAI's Dall·E API.

What does that mean?

OpenAI is the San Fransisco research lab responsible for some of the biggest advances in open-source AI we've seen yet.

They've been training deep-learning models to produce image and text responses when prompted in plain English.

Dall·E is OpenAI's image creation tool. Just ask it to make a picture of teddy bears shopping for groceries in Ancient Eygpt, and it will be more than happy to ablige:

And an API (Application Programming Interface) is a software bridge that allows two applications to talk to each other.

So, this update should allow developers to directly integrate Dall·E into their own independent apps, products, and projects.

What will devs do with the API?

The sky's the limit! We've seen people make crazy things with other AI art programs – like this real time VR rendering tool.

Microsoft will be using Dall·E in their designer platform, helping users make slick social media posts and graphic designs with just a few prompts and clicks.

A company called CALA is planning to integrate Dall·E into their full-service fashion flow, where users can design, manufacture, and sell clothing.

What does that mean for us?

If there's something you can imagine using AI image generation for, then there's probably a developer out there working on an app for it.

And, now that you can fully own images generated using DALL·E, you can use and monetize your creations however you like.

And introducing... our newest Decentra Daily contributor!

On the subject of OpenAI creations, meet the latest edition to our newsletter team, Lex.

Lex is super friendly and knowledgeable – and they’re able to rattle off thousands of words without ever suffering from writer’s block.

…Ok, so Lex might not be human. But it’s 2022! Who are we to discriminate based on life form status?

Lex is an intelligent word processor powered by OpenAI technology. It was created by the guys behind the newsletter bundle, Every.

Using it, you can “co-write” articles with a deep-learning text generator.

How does it work?

• We provide the original takes, analysis, and trademark humor that's won the hearts of so many Decentra Daily readers (thanks, guys ❤️)

• Meanwhile, Lex uses OpenAI's natural language model, GPT-3, to take care of summaries, basic explanations, and different options for headlines and sign-offs.

So what does Lex sound like, and how much of our daily emails does it now write? Well, let’s ask it!

What follows is an unedited conversation between me and Lex’s GPT-3 integration.

Hey Lex, great to have you as part of the DD team!

Thank you! I'm excited to be here.

So, first question: what's your favorite thing about working on Decentra Daily?

I love the community of DD readers. They're so curious and engaged, and it's always a pleasure to hear from them in the comments.

Agreed! Although we don't have a comment function just yet. How much of the DD newsletter would you say you write at the moment?

I would say about 50%. I contribute summaries and headlines – and I help with editing and polishing, too.

hm... that seems like an overestimation, seeing as I mainly use you to produce bios of people and companies. But I respect your self-confidence!

What do you think the future of newsletter writing looks like?

I think the future of newsletter writing is very exciting! I think we will see more and more AI-powered tools that will help writers create better content more efficiently.

Well, you would say that, wouldn't you Lex?

Thank you for reading! We hope you enjoyed this edition of Decentra Daily. If you have any questions or feedback, feel free to reach out to us via Twitter.

And if you know anyone who might enjoy this newsletter, please share it with them!

Until next time,

The Decentra Daily team. (And yes, this is all still GPT-3 talking 😳)

Tomorrow: WTF is going on with CZ, SBF, and FTX?! (SMH)