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November of 2022 saw the NFT and digital artist community shocked by an announcement by OpenSea, the world’s latest distributor of artist-made digital assets. OpenSea stated that it would be considering removing royalties from existing collections, culling the ability for many artists to generate income from their art via passive means.
This announcement sparked serious backlash, with media articles coming out and questioning the motives behind their decision. Yet, considering the power that OpenSea holds in this industry, it wasn’t long before smaller platforms came out with the same rulings. One of the leading marketplaces on Ethereum, LooksRare, announced that it would no longer enforce royalty payments.
They’re not alone in this, with X2Y2 similarly giving the option to completely get rid of royalties on collections. By moving royalties to 0%, NFT platforms actively decrease the ability for creators to make a living wage while dealing in NFT art. Especially considering the current bear market that cryptocurrency generally is going through, the NFT market is particularly slow.
For creators, the sudden loss of another stream of income has been the straw that broke the camel’s back, sending them away from these technologies. Luckily, not all blockchain systems have come out against creator royalties. Most recently, Tezos and all of its top marketplaces, have demonstrated their unconditional support for creators.
In this article, we’ll dive into the controversy around NFT royalties, demonstrating how Tezos has positioned itself as a market leader due to its alliance with artists over profits.
What’s the Big Deal About NFT Royalties?
NFT royalties are designed to afford artists more than a single way of making money from their art. In traditional spaces, artists simply have to sell a piece of art, losing the rights to the asset and getting a fixed fee in return. In order to give artists more flexibility, NFT royalties were created.
These were blanket 4-6% royalties on all further sales of digital collectibles. Although only a small percentage, valuable NFTs can sell for many times more than their first sale value, with royalties ensuring that artists are not exploited and then forgotten about. An example of this happening in the world of art was with Harvey Ball. in 1963, he sold the original design for a yellow smiley face for $45.
The design was resold in 2000 for $500,000,000, with Ball not receiving a cent. With this in mind, royalties are a phenomenal way of protecting artists.
But, this isn’t an issue that only impacts individual artists. When a range of world-leading blockchains all disagree on something as fundamental as how they manage one of their leading technologies, it comes off as worrying for investors.
Industries that are unified and moving in the same direction are easy to trace, and even easier to bet on. When leading blockchains all start doing different things, it creates a level of individualism that requires much more research on the part of investors before being confident in an investment.
By moving from one opinion camp to another and then going back on yourself, many blockchain networks have made themselves look unreliable. By committing to NFT royalties, Tezos takes a firm stand and places itself on the right side of the discussion.
Especially considering that Tezos is an energy-efficient blockchain, by taking such a strong stance on NFTs, Tezos marks itself as highly interested in this industry. And, with the recent worries about the energy impact of NFTs, creators are looking for a way to reduce their impact.
By actively supporting creators by offering royalties while also cutting down on the total energy consumption of minting NFTs, Tezos has put itself at the very forefront of this entire industry. They fight for creators, enable NFTs to be produced without major energy consumption, and provide a comprehensive network of marketplaces.
Simply put, Tezos is perfectly positioned to become the leading blockchain network in this digital space.
Community Support Has Increased Dramatically
For digital artists, NFT royalties present a potential lifeline. As the industry value standards are decreasing, royalties could be one of the few incomes that an artist completely devoted to NFTs is able to generate.
With this in mind, Tezos’ firm actions have triggered a huge community response across blockchain systems. All of the ecosystems that have connections to Tezos have come out in support of creator royalties. The hashtags #TezosRoyalty, #RespectRoyalties, and statements around rejecting the switch to 0% royalties have come out in droves.
Tezos has done what no other blockchain network could by uniting its community of attached ecosystems. It has created a unified response to a social problem within blockchain, getting behind individuals and supporting their ability to earn money through this financial system.
As blockchain has long been about user-first systems, the support that Tezos and all associated ecosystems are showing is getting back to the core of what Web 3 is meant to be about. This on-chain solution has many people within the blockchain community talking, with public sentiment being at an all-time positive high.
Tezos has already made a name for itself in the world of blockchain due to its extreme energy efficiency. Its most recent move of declaring support for NFT artist royalties further the company’s position in this market, demonstrating that they’re ready to fight for the rights of the individual.
With unity across all Tezos marketplaces, this ecosystem exemplifies the very best of what Web 3 could be. Instead of focusing on corporate greed, as other ecosystems have done with their severance of artist support, Tezos sticks up for digital art and makes it a priority in their ecosystem.
When comparing the public response across OpenSea and Tezos, the difference is astounding. Making itself as an industry leader, artists have started to flock to the Tezos network. If things continue this way, 2023 will be a phenomenal year for the ecosystem.
It goes to show – support the community, and they’ll support you.