Bored Ape Yacht Club (BAYC) founders, Yuga Labs, are preparing to scale back their involvement with OpenSea, in response to the platform’s imminent discontinuation of its on-chain royalty enforcement feature known as Operator Filter.
Introduced in November 2022, the Operator Filter offered creators the ability to limit secondary sales of nonfungible tokens exclusively to marketplaces that upheld creator royalty rules, effectively filtering out platforms like Blur.
However, on August 17, OpenSea declared its intention to phase out the tool by the end of August. The decision was attributed to a lack of comprehensive adoption across the ecosystem, platforms finding ways to bypass the tool, and resistance from content creators.
The subsequent day, Yuga Labs’ CEO, Daniel Alegre, took to Twitter to communicate that the company would gradually decrease its utilization of OpenSea’s Seaport marketplace smart contract:
The announcement garnered a favorable response from the Bored Ape Yacht Club (BAYC) community, with notable figures in the NFT space like EllioTrades and Alex Becker also expressing approval for the decision.
@dotta, the CEO and co-founder of the Forgotten Runes Wizards Cult NFT project, added their support as well. They appreciated Yuga Labs’ approach in addressing the situation with OpenSea.
Particularly noteworthy is Luca Netz, the CEO of the Pudgy Penguins NFT project, who appeared to allude to a similar course of action as Yuga Labs. He responded to the company’s announcement by commending it as a “commendable step.”
In a distinct post shared by Coinbase NFT on August 18, emphasizing their dedication to upholding creator royalties, Netz added further intrigue by stating, “Let’s discuss.”
The debate surrounding the endorsement and enforcement of creator royalties has become a source of division within the NFT community over the past year.
In the initial stages of the NFT frenzy around 2021, the prevailing norm was to ensure the enforcement of creator royalties. However, this landscape shifted when platforms like Blur emerged in October 2022, capturing significant market share by offering fee-free trading and an optional creator royalty payment structure. Consequently, trading fees and royalty percentages began to decrease across various platforms as they vied for user attention.
At present, the NFT community appears to be divided between two factions: one that prefers the economical NFT trading model presented by platforms like Blur and advocates for alternative means of compensating creators, and another that vehemently supports the importance of upholding royalty payments.