The collaboration between Yuga Labs, the progenitor of the Bored Ape Yacht Club, and Magic Eden to launch a new Ethereum-based NFT marketplace is a significant evolution in the Web3 space. The partnership promises a platform that will enforce creator royalties, a vital revenue stream that rewards creators for their ongoing contributions to the digital art and collectibles markets. This enforcement comes at a time when the controversy over royalty payments has reached a fever pitch, with some NFT marketplaces opting to make such payments optional or doing away with them altogether in an effort to attract more traders.
Creator royalties are not a mere addendum to the NFT ecosystem; they are its bedrock, ensuring that artists continue to earn from their works on the secondary market. Royalties typically range between 2.5% and 10% of the secondary sale price and have been widely honored by marketplaces until recently. With major players like OpenSea reconsidering their stance on royalties, the partnership between Yuga Labs and Magic Eden can be seen as a stand for creators’ rights12.
This new Ethereum marketplace by Magic Eden, backed by Yuga Labs, is poised to set a precedent in the NFT domain by being contractually obligated to protect creator royalties32. This commitment is a clear signal to the market and the creators that their work and the ensuing profits are respected and protected. Moreover, the marketplace will employ new smart contracts with properties designed to ensure that royalties are honored, without affecting the trading experience or necessitating KYC procedures for traders2.
The move by Yuga Labs and Magic Eden could be a harbinger of a more equitable and sustainable ecosystem for NFTs. By standing firm on the issue of royalties, Yuga Labs is making a statement that could encourage other marketplaces to follow suit, effectively setting a new industry standard4. The anticipation within the NFT community for this marketplace is palpable, as it promises not only to address the compensation issues for current creators but also to draw new talent into the space by offering more security for their work4.
This is a DAO submission authored by James
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