Major NFT Creators Protest Blur, OpenSea’s Royalty Rates

Several major NFT creators, such as Yuga Labs Inc. (the creator of the Bored Ape Yacht Club and CryptoPunks) and Pudgy Penguins collection, are reconsidering their listings on dominant marketplaces like Blur and OpenSea.

This is reportedly due to the significant royalty cutbacks implemented by these platforms this year, which have resulted in a decline in secondary market transactions. Bloomberg reports that some creators are either suspending new listings or contemplating such actions.

According to data analytics firm Nansen, royalties in September amounted to only $2.4 million, compared to a peak of $269 million in January. The reduction in royalty percentages by both Blur and OpenSea was an attempt to increase transaction volumes in the declining NFT market.

Yuga Labs has taken a significant step to stop trading its latest NFT collection, Mara, on Blur and OpenSea. The company has clarified that only marketplaces that maintain adequate royalties can list their tokens. The decision was made in light of the adverse market conditions, which led to job cuts within the company.

Initially, Blur gained popularity in the market with its competitive low-fee structure, overtaking OpenSea and compelling the latter to reevaluate its fee policies. Blur’s base royalty fee is set at 0.5%, while OpenSea has shifted to optional creator fees. These platforms are responsible for approximately 70% of all NFT transactions.

As NFT royalties decline, many projects are venturing into different markets, such as gaming or physical collectibles, to sustain their income. For instance, Pudgy Penguins have diversified into merchandising, earning $7 million in product sales this year, compared to a mere $300,000 from NFT royalties.

Yuga Labs and Pudgy Penguins are the top collections driving two-thirds of this year’s NFT trading volumes. Any potential withdrawal from mainstream platforms by these collections will undoubtedly significantly impact the overall market.