Yuga Labs vs OpenSea – NFT Royalties Drama
Yuga Labs, the creators of Bored Ape Yacht Club (BAYC), are planning to reduce their support for OpenSea due to the platform’s decision to remove its royalty enforcement tool called Operator Filter. This tool was launched in November 2022 to allow creators to limit NFT sales to platforms that enforce creator royalties, excluding platforms like Blur.
However, on August 17, OpenSea announced that it would discontinue the Operator Filter by the end of August. The reason cited was the lack of widespread adoption, platforms bypassing the tool, and opposition from creators.
In response, Yuga Labs’ CEO, Daniel Alegre, shared through a statement on X (formerly Twitter) that the company would gradually phase out the use of OpenSea’s Seaport marketplace smart contract. The aim is to complete this process by February 2024 in alignment with OpenSea’s approach. Alegre emphasized Yuga Labs’ commitment to protecting creator royalties to ensure fair compensation.
The BAYC community responded positively to this decision, and well-known figures in the NFT space like EllioTrades and Alex Becker also expressed support. Other NFT project founders, including Luca Netz from Pudgy Penguins NFT project, hinted at following Yuga Labs’ lead.
The topic of creator royalties has divided the NFT community. While enforcing royalties was common practice during the early stages of the NFT boom in 2021, platforms like Blur gained popularity in 2022 by offering zero trading fees and an optional creator royalty model. This competition led to decreased trading fees and royalty percentages across various platforms.
The NFT community currently consists of two main factions: those in favor of cheaper NFT trading models like Blur’s, arguing for alternative creator compensation methods, and those who strongly advocate for maintaining royalty payments.