SNEAK PEEK
- OpenSea supports ERC-721C, enabling creators to implement enforceable on-chain royalties.
- The standard addresses NFT wash trading by standardizing token transfer conditions.
- Compatibility with Seaport 1.6 allows sales under specific conditions, boosting creators’ earnings.
OpenSea, the leading platform for non-fungible token (NFT) trading, has announced its support for the ERC-721C token standard. This innovation empowers creators with the ability to set and enforce on-chain royalties through a streamlined process. Created by blockchain gaming company Limit Break in May, the ERC-721C standard addresses the issue of NFT wash trading by establishing uniform conditions for token transfers, including royalty agreements, across various platforms.
Before the advent of ERC-721C, it was a straightforward process to circumvent creator royalties on secondary markets such as OpenSea and Blur. Users could transfer NFTs through self-custody wallets or other marketplaces that did not respect the royalty stipulations set by creators. This practice not only deprived creators of their deserved earnings but also encouraged the problematic behavior of wash trading. Wash trading involves trading NFTs among one’s wallets to farm tokens, a tactic that undermines the NFT industry’s integrity.
The compatibility for ERC-721C on OpenSea became feasible following the Ethereum network’s Dencun upgrade on March 13. This development signifies a major step forward in ensuring creators receive their rightful earnings. OpenSea elaborated that sales enforcing creator earnings under the new standard would be confined to OpenSea and select marketplaces integrated with Limit Break’s Payment Processor.
This feature aligns with OpenSea’s Seaport 1.6, facilitating the sale of NFTs under specific conditions, such as variations in metadata in response to sales volume. While creators have discretion over the percentage of royalties, which typically ranges from 2.5% to 10%, the inclusion of ERC-721C could significantly enhance creators’ revenue streams. Notably, the top ten NFT collections have amassed over $345 million in royalties to date, showcasing the substantial impact of creator fees on the digital art ecosystem.
In conclusion, OpenSea’s integration of the ERC-721C token standard represents a pivotal advancement in the NFT domain. It not only secures creators’ earnings but also promotes fairness and transparency across the NFT market.
