Multi-chain NFT marketplace Magic Eden has revealed its plan to introduce a new Ethereum platform by the year-end, created in collaboration with Yuga Labs, the creator of Bored Ape Yacht Club. This initiative aims to firmly uphold creator royalties for NFT sales.
“Contractual Obligation” for Royalties
The announcement confirms that Magic Eden will be “contractually obligated” to provide Yuga Labs with a share of secondary market sales from future NFT collections. This commitment reinforces the importance of respecting creator royalties within the NFT space.
Planting something new for all creators.
We’re partnering with Magic Eden to launch the new Magic Eden ETH marketplace – the first major ETH marketplace contractually obligated to honor creator royalties.
The marketplace will launch end of 2023, more details soon. pic.twitter.com/iDrBM46nHk
— Yuga Labs (@yugalabs) November 4, 2023
Magic Eden intends to implement new smart contracts to ensure royalties are distributed during secondary market sales. While the specific technical details will be unveiled closer to the marketplace’s launch, it has been confirmed that the widely recognized ERC-721 Ethereum NFT standard will be used. NFTs minted with specific “marketplace contract properties” will have royalties enforced.
This change will not impact the user experience, meaning traders will not be required to undergo know-your-customer (KYC) checks or any additional identification processes.
Background on Creator Royalties
Creator royalties, typically ranging from 2.5% to 10% of the sale price of NFTs, allow artists and project creators to benefit from secondary sales. However, in the latter half of 2022, several marketplaces began implementing workarounds to allow traders to bypass these fees or pay reduced amounts. This practice prompted major marketplaces, including OpenSea, to discontinue the enforcement of creator royalties in August.
Had to pick out this this clean boy with Magic Eden colors to celebrate.
— Jack Lu (@0xLeoInRio) November 3, 2023
Yuga Labs criticized OpenSea’s decision and took a firm stance on supporting creator royalties. The collaboration with Magic Eden aims to ensure that royalties are consistently upheld, reflecting the commitment to content creators within the NFT ecosystem.
Potential Impact and Future Benefits
While Yuga Labs may consider withholding future benefits for NFT holders who purchase from marketplaces that do not enforce royalties, this is still under consideration. The preferred approach is to encourage the use of platforms that uphold creator royalties and offer an optimal NFT experience.
The collaboration between Magic Eden and Yuga Labs represents a significant effort to restore and enhance the adherence to creator royalties, aligning with the interests of creators and ensuring a fair and sustainable NFT ecosystem