The Decline of NFT Royalty Payments: How Platforms Blur and OpenSea Are Impacting Artist Earnings
The rise of royalty-optional platforms like Blur and OpenSea have contributed to declining royalty payments for artists across the space. According to a report from data analytics platform Nansen, NFT royalty payments hit a two-year low in June. Here are the key points:
- In April 2022, royalty payments reached their peak, with creators earning 28,000 ETH in one week.
- In contrast, June’s peak week saw creators collectively earn only 2,000 ETH.
- The decline is partly due to Blur and OpenSea’s policies, which allow collectors to forgo paying royalties unless specifically enforced.
- Blur enforces a minimum 0.5% royalty fee, while OpenSea defaults to a minimum of 0.5% if not enforced by the smart contract.
- Despite the decline, some blue-chip collections like Yuga Labs and Chiru Labs have still earned millions in royalty payments.
NFT platforms are vying to keep royalty payments low to incentivize trading. Blur has dominated royalty payments in recent weeks, while OpenSea remains a prominent player. The dropoff in payments began before the Bored Ape Yacht Club’s floor price fell and Azuki’s Elementals mint mishap. Other NFT marketplaces have also changed their royalty enforcement policies, following Blur’s lead. Overall, the decline in royalty payments highlights the ongoing tension between platforms, collectors, and artists in the NFT space.
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Hot Take
The decline in NFT royalty payments is concerning for artists who rely on these earnings. Platforms like Blur and OpenSea need to find a balance between encouraging trading and ensuring fair compensation for creators. It’s crucial for collectors to recognize the value of artists’ work and actively support them by paying royalties. As the NFT space continues to evolve, it’s essential to prioritize the sustainability and success of artists in this rapidly changing market.
