November 3, 2022 – 2 Min Read
LooksRare, one of the world’s most popular marketplaces for non-fungible tokens (NFTs), is the latest in the industry to scrap compulsory royalty fees for transactions on its platform.
LooksRare is the latest platform to announce that it wouldn’t add royalty fees by default for NFT transactions. Instead, it’ll dedicate 25% of the fees generated by its exchange protocol to compensate creators.
With this change, it’s now up to the buyer to choose if they want to pay royalty fees to support creators. Before now, that was non-negotiable. This change means NFT transactions will become cheaper for LooksRare users and will likely draw praise from this cohort. However, it has drawn backlash from creators whose stream of royalty fees will be significantly reduced.
“The [average] royalty paid is around 6%,” said NFTstatistics.eth, the Twitter handle for the director of research at PROOF Collective, the organization behind the Moonbirds NFT collection. “I wouldn’t say that giving artists 0.5% (a 90%+ cut) while keeping your own fee at 1.5% (a 25% cut) is a competitive solution that benefits creators.”
Before LooksRare, several big NFT marketplaces moved to scrap compulsory royalty fees, including X2Y2 and Magic Eden. This has raised fears of a race to the bottom that might lure other NFT marketplaces to follow suit. Many speculate that OpenSea, the biggest NFT marketplace by trading volume, may pull a similar move and cut down the stream of royalty fees available to creators at large.
Contributor
Chisom Maduonuorah is a writer passionate about tech startups, venture capital, the global stock markets, and emerging financial markets like cryptocurrency. When not writing, you can find him staring into the sky pondering what life is about.
2 Min Read
2 Min Read
2 Min Read
Sign up for This Week in DeFi to get the latest cryptocurrency and DeFi trends.
DeFi Rate
@ 2022 DefiRate.com. All rights reserved
Author
Administraroot
