July 21, 2024
In Anticipation of Magic Eden's Marketplace, Yuga Labs Elevates NFT Royalty Security

In Anticipation of Magic Eden’s Marketplace, Yuga Labs Elevates NFT Royalty Security

In a bold move within the burgeoning world of non-fungible tokens (NFTs), leading NFT studio Yuga Labs has declared its intention to support marketplaces prioritising creators’ royalties. The announcement, made on the cusp of Magic Eden’s Ethereum marketplace launch, signals a significant shift towards a more creator-centric approach in the NFT space.

“Yuga and Magic Eden are taking a big step forward to bring us back to a creator-led web3,” the company stated on Monday. “In sync with the marketplace launch, tomorrow we will be sunsetting our support for marketplaces that don’t support royalties for all creators. This means that our collections with a royalty filter will only be traded on marketplaces that respect creator royalties.”

This decision comes amidst a backdrop of shifting dynamics in the NFT market. Blur, a marketplace that gained prominence by offering lucrative incentives and reducing royalty structures, managed to seize a significant portion of NFT trading volume over the past year. This success prompted other platforms, including the formerly dominant OpenSea, to follow suit by lowering their royalty fees to stay competitive.

However, the combination of reduced royalties and declining trading volumes led to a notable decline in revenues for Yuga Labs last year. In response, Magic Eden, in collaboration with Yuga Labs, announced the launch of a marketplace dedicated to Ethereum NFTs, with a commitment to enforce creator royalties.

While Yuga Labs’ decision to prioritize creator royalties may initially appear symbolic, it underscores a broader shift towards a more equitable NFT ecosystem. Notably, the company has opted to exempt its top collections, Bored Ape Yacht Club and Mutant Ape Yacht Club, from this change, as these collections generate the majority of royalty revenue.

Steven Zheng, a research analyst at The Block Research, commented on the impact of Yuga Labs’ announcement, stating, “The vast majority of royalty-generating NFTs from Yuga Labs’ collection fall under the Bored Ape Yacht Club and Mutant Ape Yacht Club brand, which are not impacted by this change. Thus, this update doesn’t move the needle much, in terms of royalty revenue, for Yuga Labs, but does incentivize the team to build out and provide value to its Otherside collections.”

Yuga Labs has provided a list of collections that will exclusively trade on marketplaces committed to protecting creator royalties. These collections include Otherside collections linked to the company’s metaverse platform in development and some Moonbirds NFTs recently acquired by Yuga Labs.

As the NFT landscape continues to evolve, Yuga Labs’ stance on creator royalties could catalyze broader industry reform, promoting fair compensation for creators and fostering a more sustainable ecosystem for digital art and collectables.

Image: Wallpapers.com

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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