credit: nft now staff

Open Metaverse Alliance Seeks Universal Standard for Creator Royalties

BY Andrew Rossow & Erika Lee

October 17, 2023

Industry leaders have finally had enough of the ongoing back-and-forth nonsense involving the integration of NFT creator royalties that continues to hinder the fundamental growth of our digital age through decentralization and fair compensation. 

What Are Creator Royalties?

Traditionally, royalties have served as a mechanism for creators to fairly receive compensation for their intellectual property – copyrights, trademarks, and patents –  long after the first sale. 

However, conventional markets have also made it extremely difficult for artists to survive and thrive doing what they love to do most in this world. 

For creators of digital art and NFTs, this mechanism is no different, except for bringing the secondary market into the picture as an entirely new avenue for these artists to continue producing their work without fear of losing out on secondary sales – or, at least that’s what has been touted as the heart and soul of true decentralization in our digital age.

Creator royalties, historically ranging in fees between 2.5% and 10%, were initially hailed as a revolutionary feature. However, the crypto bear market and greed have led newer NFT platforms to abolish such fees, using “other” appealing factors to try and divert users from dominant platforms like OpenSea and Blur.

The Royalty Wars

Two years have passed since Beeple’s historic $69.3 million sale of his Everydays art piece showcased the potential and utility of digital art and NFTs. The direction we’ve been traveling in has completely sent us backward into the traditional Web2 creator economy infrastructure. 

For those new to NFTs and Web3-infused digital art, these NFT marketplaces play a crucial role in the nascent stages of Web3, with the ability to dictate and set royalty percentages for NFTs sold on their respective platforms. This power heavily influences overall NFT trading volumes as one of many factors that go into showcasing key performance indicators (KPIs) that allow the industry and participants to analyze the health and future of these NFT collections and the platforms they live on.

Since as early as 2021, the creator royalty debate has been the hottest subject that, apparently, is so puzzling as to completely hinder the anticipated growth of a truly digital age. We’ve seen industry-leading marketplaces, such as OpenSea, Blur, Magic Eden, X2Y2, and others, continue to go back and forth on whether creator fees should be “mandatory,” “optional,” or flat-out “zero.”

From a Web3 lens, this is a no-brainer – Royalties. Always.

Yet, marketplaces are clinging on to what they know, barring any true progress towards true decentralization.

What Have We Seen?

Earlier this year, these marketplaces reduced royalty rates when tokens exchanged ownership in attempts to rejuvenate the NFT trading sector, which saw explosive growth during the COVID-19 pandemic but has since faced a sharp downturn. 

Looking back to 2022, creator royalties plummeted from their peak of $269 million in January to just $2.4 million by September, according to Nansen data.


But when Blur entered the picture in 2023, its tactics to slash creator fees and gamify user experience seemed to have paid off. In February 2023, Blur surpassed OpenSea in trading volume. 


Shortly after, even OpenSea, once a staunch defender of creator fees, capitulated, once again changing its royalty position in August.

Yuga Labs recently blocked trading of its latest project, “Legends of Mara,” on both Blur and OpenSea. Yuga told Bloomberg that they would only allow those exchanges who “respect” royalties to list their portfolio of NFT collections. Considering Yuga’s monumental $9 billion trading volume in the NFT market, such decisions could reshape the landscape.

In August, Yuga Labs announced their decision to block NFT trades on OpenSea over the creator royalties controversy.

Open Metaverse Alliance 

And now, the Open Metaverse Alliance (OMA3) aims to put an end to the royalty wars once and for all.

OMA3, a coalition encompassing a multitude of influential blockchain, NFT, and metaverse firms, announced its intention on Oct. 17 to form a dedicated royalty-centric task force that will work to develop and strategize the standardization and preservation of creator royalties across NFT marketplaces.

From the OMA3’s perspective, this unwavering stubbornness and greed from marketplaces like OpenSea and Blur to deprive artists and creators of profits that are rightfully theirs only continues to endanger the very essence of what Web3 was supposed to be – a decentralized ecosystem that houses an “open metaverse,” or a unified online world that allows for users (us) to finally be able to maintain ownership over our digital assets and bring them “off platforms.” 

In other words, these in-game digital items you spend hundreds of dollars on but technically don’t own and can’t use, but from within the platform, they can finally follow you wherever you go. And for creators, this is a major transformation of digital ownership. 

Consequently, these marketplaces are feeling the effects of these widely acclaimed creators leaving the platform as their returns and trading volume continue to dwindle.

OMA3’s royalty-centric task force intends to devise strategies to uphold creator royalties universally, proposing standards that its member entities would uphold. Industry leaders, including Animoca Brands, Yuga Labs, and Magic Eden, are just a few companies that will be joining the task force. 

Chris Akhavan, Chief Gaming Officer at Magic Eden, told nft now that “[Magic Eden’s]  commitment to creators is unwavering.”Partnering with OMA3 amplifies our efforts to create sustainable creator economies where every creator is recognized and rewarded fairly,” Akhavan added

“Partnering with OMA3 amplifies our efforts to create sustainable creator economies where every creator is recognized and rewarded fairly,” Akhavan added. 

In addition to Animoca, Yuga, and Magic Eden, OMA3 also shared that other industry leaders, including Decentraland, The Sandbox, Alien Worlds, and Upland, will be joining the initiative. 

“We at Yuga are committed to building a web3 world that’s interoperable and fair for all creators,” Mike Seavers, Chief Technology Officer at Yuga Labs, said. “And we’re pleased to be collaborating on the OMA and the standards we believe it will drive its success.” 

Sebastien Borget, CEO of The Sandbox and Co-founder of OMA3 shared more with nft now about OMA3’s mission to long-term positive impact on the NFT market and all the actors in this ecosystem.

“At The Sandbox, we believe that every single NFT creator should receive a fair part of the royalties their creation has generated each time user-created content is resold on a secondary marketplace,” Borget said. “We have been public supporters alongside Animoca Brands and YugaLabs, and are glad to be joined in this effort by more companies to establish a standard.”

Tick, Tock

The showdown between marketplaces and creators is intensifying, underlining the critical question of how the decentralized promise of blockchain reconciles with commercial imperatives. Web3 is here as a complement, not a supplement, to fix the technological infrastructures we’ve grown accustomed to during the traditional Web2 era. 

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