Royalty payments to NFT creators are at the lowest level in two years: Nansen | CoinDesk JAPAN | Coin Desk Japan

Royalty payments to NFT creators fell to their lowest level in two years in June, according to a report released by cryptocurrency analytics firm Nansen on May 5. Royalty payments peaked in April 2022, with $28,000 ETH (approximately 9.5 billion yen, converted to 125 yen to the dollar) being paid to creators in one week. On the other hand, even in the peak week of June, it remained at 2,000 ETH (approximately 551 million yen, converted to 145 yen to the dollar).

Tensions between marketplaces and creators have increased over the past few months over mandatory royalty payments.

Royalties decrease with Blue and OpenSea support

Royalties payments are optional The rise of marketplace Blur and the policies of major marketplace OpenSea are driving a sharp decline in royalty payments. Currently, in order for OpenSea to mandate royalty payments to creators, an on-chain enforcement method must be built into the collection’s smart contract. If not incorporated, royalties can be set from a minimum of 0.5% by the listing collector. Blur, on the other hand, mandates a minimum royalty of 0.5%. In both cases, collectors can arbitrarily set higher royalties for creators, but it seems to be uncommon.

Nansen analysts Javier Cerdan and Edward Wilson told CoinDesk that the race will see two marketplaces vying to encourage transactions while keeping royalty payments low. pointed out that there is

“Royals have been declining since February, and Blur has increased its share of royalties paid to bring it on par with OpenSea,” he said. Blur has a monopoly.”

Millions of dollars in royalties on select collections

Nansen reports that although royalty payments fell overall in June, some of the best collections have generated millions of dollars in royalty payments since launch.

As of July 4th, Yuga Labs has launched the popular NFT collections “Bored Ape Yacht Club (BAYC)”, “Mutant Ape Yacht Club (MAYC)”, and the NFT “Otherdeed” representing the land of its own metaverse “Otherside”. The entire collection, including ”, received royalties totaling nearly $166 million. In addition, Web3 company Chiru Labs has reportedly earned more than $58 million in royalties from its flagship NFT collection “Azuki” and its derivative projects “Beanz” and “Elementals.”

The Loyalty Controversy Triggered by Blur’s Entry

The report points out that the drop in royalty payments began before BAYC’s floor price fell to a 20-month low and before Azuki’s Elementals issuance stumbled.

Whether or not to honor loyalty has been much debated since October, when Blur challenged major marketplace OpenSea by launching a zero transaction fee marketplace to appeal to professional NFT traders. After criticism from creators and collectors, Blur changed the system to make collections voluntary and obligated to pay royalties to creators.

Other NFT marketplaces such as X2Y2 and Magic Eden have also recently changed their royalty enforcement policies after temporarily switching to royalty-free.

｜Translation: CoinDeskJAPAN
｜Editing: Rinan Hayashi
｜Image: Nansen
｜Original: NFT Creator Royalty Payments Hit Two-Year Low: Nansen