Only a few week ago, NFT marketplaces were busy making royalties optional, but the tide seems to be shifting. Ethereum-based NFT marketplace X2Y2 has announced that it will enforce royalties for both existing and new collections.
Earlier this month, OpenSea – the biggest NFT marketplace – wanted to make royalties optional, but a creator backlash forced it to hold back. Now, X2Y2 is following in its footsteps.
Previously X2Y2, launched earlier this year, had a Flexible Royalty model that allowed creators and collectors to have a say on how the marketplace regulated royalties.
However, P2P collections were not allowed to enforce royalties under this setup, and only a select few collections, such as artwork and access passes, could opt for full royalties.
Over a Twitter thread, X2Y2 acknowledged OpenSea’s brave move and said that a lot of new collections have sided with OpenSea’s royalty enforcement code, which blocks marketplaces that don’t enforce royalties.
“We may have a different view on the best way of handling royalties with OpenSea, yet we respect the code. With OpenSea risking its market share and taking a brave move to defend royalties, they have our respect!” wrote X2Y2. “Code is law,” and we respect the law.”
X2Y2 said it will completely remove the Flexible Royalty model for new collections that use OpenSea’s filter code, and royalties will be made mandatory for existing collections.
Soon after the announcement, OpenSea replied to the Twitter thread expressing its contentment and said that it had removed X2Y2 from its blacklist tool.
As new decentralized marketplaces started taking away market share from the centralized players because of their zero-royalty model, existing marketplaces were forced to make royalties optional.
However, criticism from top projects like BAYC might be now helping in reversing the trend.