Mark Cuban Calls OpenSea NFT Optional Royalties an Industry Mistake
Date: 2023-08-19 Author: Karina Ziganova Categories: CRYPTO PAYMENTS, BUSINESS
Billionaire investor Mark Cuban criticized OpenSea's decision to make non-fungible token (NFT) royalty payments optional, calling it a "HUGE MISTAKE" that would hurt the industry and lower confidence, according to an August 18 tweet.
Royalty NFTs
On August 17, OpenSea said it would stop charging royalties on secondary sales by the end of this month.
Typically, NFT creators receive royalties from each sale of their assets on platforms such as OpenSea. These royalties, capped at 10% on OpenSea, vary by market; For example, LooksRare and SudoSwap offer creators the option to choose a royalty model.
The market's decision to make royalties voluntary came after it lost market share to competitors such as Blur, which introduced optional royalty payments and other trading incentives to attract more users to its platform.
OpenSea's NFT trading volume has fallen to less than 25% from a peak of over 90% during the year, according to Dune analysts. The marketplace is trying to regain its dominance by introducing new measures to attract more users.
Cuban stands for royalty
Cuban called OpenSea's latest royalty decision a desperate move, saying it was wrong.
In his opinion, the main problem was the enforcement of royalties on all NFT trading floors, which should be corrected. But he disagreed that optional royalty is the way forward.
“The optional royalty approach is killing future apps that go way beyond collectibles. That’s where the most money will be,” he added.
Cuban is an investor in OpenSea.
Meanwhile, some users noted that OpenSea had no choice if it wanted to remain relevant in the industry.
Sheetfu, CDO of the dominant NFT market on the Solana (SOL) MagicEden network, opined that this was a technology issue and that the solution should be at the protocol level. According to him, creators should be allowed to use various ways to secure royalties.
