- Magic Eden COO calls 0% creator royalty policy a “prisoner’s dilemma”.
- The Solana NFT marketplace recently introduced an optional royalty policy.
- The marketplace announced its collaboration with Coral Cube to allow traders to determine royalties themselves.
The popular Solana NFT marketplace, Magic Eden had recently made royalties optional on their platform. The company announced that traders will have the freedom to decide how much royalty percentage they wish to pay.
For this, the company collaborated with Coral Cube, an aggregator that facilitates zero royalty NFT sales. All these announcements were subsequently made to light last week.
The decision helped Magic Eden survive the market conditions where major NFT marketplaces were introducing zero royalties. The NFT trading platforms that were introducing zero creator royalties were surging in popularity. Observing the market shift, the largest Solana NFT marketplace decided to make royalties optional on the platform.
The NFT community’s reaction to this announcement was swift and somewhat divided. Brocoli DAO a community built around CyberVillainz and CyberHeroez NFT collections said that they have already lost $27000 because of the 0% royalty policies of the marketplaces. They will be blocking those who will avoid royalties from their Discord channels.
While the royalty supporters in the Solana network had a major blow. Magic Eden accounts to 86% of the total Solana NFT sales.
Co-founder and COO Zhuoxun “Zedd” Yin said in an interview that Magic Eden has not entirely removed royalties. They still support royalties and are finding ways to make them enforceable on their platform.
In my view, this is sort of a classic prisoner’s dilemma situation… We felt that in the absence of technically enforceable solution at the protocol level things would continue to trend basically toward optional royalties anyway,
He also added,
Something’s gotta give. Either the whole ecosystem has to come to the table to effectively figure out what is the right solution… Or this just regresses into a slow, slow burn toward basically 0% royalties,
After the optional royalty announcement, Magic Eden’s trading volume sits at less than 0.5%. Prior to that, it was between 3% to 8%. This does not suggest a mass departure of users from the platform. The NFT community and the Magic Eden team are closely watching the effect of its decision.