Magic Eden, the largest Solana-based NFT marketplace, revealed that it’s switching to an optional royalty model.
Buyers will now have an option to choose the number of royalties they would want to pay while making a purchase on the platform. The firm also said that it would remove the 2% transaction fee starting October 14.
Magic Eden has been the leading NFT marketplace on Solana with more than 90% market share, per DappRadar data. However, its dominance is quickly eroding as new and evolving marketplaces like X2Y2, Yawww, and Solanart have been able to lure users by offering zero-royalty transactions, allowing NFT traders to make greater profits.
Even though the company has always resisted moving to a royalty-free model, the shifting trend appears to have forced Magic Eden’s hands.
“This is not a decision we take lightly. We also hope it is not a permanent decision. Today, royalties are not enforceable on chain,” wrote Magic Eden in a twitter thread. The platform also posted a chart depicting the use of optional royalty marketplaces with respect to the number of wallets.
“It’s also very sad, it’s also very tragic. We did not want to be in this position, but the market has already spoken in regards to optional market royalties,” a Magic Eden representative said on a Twitter Space discussion. “It was effectively a race to the bottom.”
The company also intends to create a $1 million fund to improve royalty enforcement tools and explore alternate payment avenues outside royalties after the platform raised $130 million at a $1.3 billion valuation back in June.
Last month, Magic Eden extended support for Ethererum-based NFTs, which received backlash from the community. It has also been criticized for embracing significant VC investments and using a closed-source code.