Magic Eden Replicates OpenSea’s Strategy to Enforce Royalties

Magic Eden Replicates OpenSea’s Strategy to Enforce Royalties 

Solana-based marketplace for non-fungible tokens (NFTs) has joined rival OpenSea in launching a tool that compels the instant payment of royalties to creators. 

Magic Eden replicates OpenSea’s approach, announced in early November, with an open-source tool released to enable creators to remit royalties from their collections. The December 1 communication by Magic Eden indicated the Open Creator Protocol (OCP) tool is established upon the Solana-based SPL token. Nevertheless, the firm’s representative clarified that the platform would involve an opt-in tool designed to enforce a self-custodial concept in the wake of the FTX crash.

Royalty Compliant World

The OCP tool is founded on the idea floated by Magin Eden chief executive Jack Lu in his November 5 address at Solana’s Breakpoint conference. Lu confessed the need for a sustained revenue model accessible to the NFT creators.  

Lu added that creators using the OCP tool would prohibit marketplaces that fail to enforce royalty payments on yields accruing from their collections. Surprisingly, Magic Eden declared retention of the optional royalties on its platforms to accommodate collections yet to embrace the OCP tool. 

The company cites its mid-October commitment to advance to the royalty-compliant world with a system that defends royalties’ settlement for the Solana community. The Twitter thread conveyed by Magic Eden indicates it will avoid the retroactive application of OCP to the present collections.

Instead, Lu encourages creators to consider burning and reminting in scenarios when remitting NFTs to unrecoverable wallet addresses. Besides, such applies when reissuing such collections.  

Lu announced initiating active conversations with partners drawn from the Solana ecosystem to embrace timely settlement solutions for NFT creators. The address demonstrated that immediate support for royalties via OCP was necessary before Magic Eden sought coordinated solutions offered collectively with other ecosystem partners.  

Additional Features of the OCP Tool

Lu portrayed the OCP tool will offer comprehensive solutions given the inclusion of features empowering creators to exercise dynamic royalties. This feature reduces royalties’ value by targeting buyers who offer higher prices. 

Additionally, OCP will support the transferability of customizable tokens to impose trade caps on NFTs. Also, it accommodates trade freezes for defined periods. 

Launching the Optional Royalties 

Previously, Magic Eden switched to the optional royalties model that enabled buyers to define the fees they contributed to NFT projects. The mid-October switch attracted split opinions within the NFT community. 

The feedback allowed the OCP tool to advance to the on-chain tool that matches the OpenSea platform it introduced in early November. The rival’s tool permits NFT sales to marketplaces that enforce royalties.

Previously, Magic Eden partnered with aggregator Coral Cube alongside peer marketplace in launching Metashield – a royalty enforcement tool. The divided opinion over its viability informed the recent switch to optional royalties.