LooksRare, an NFT marketplace built on the Ethereum blockchain, made the decision to adopt optional royalties on its platform – but will continue to pay creators.
LooksRare is the latest to join the growing list of marketplaces with an optional-royalties business model, following the recent move by Solana-based Magic Eden.
According to a statement, the decision to remove enforceable royalties has to do with the growth of zero-royalty marketplaces, which “has eroded the general willingness to pay royalties throughout the NFT space.”
However, LooksRare’s model differs from the others. Even though buyers will have the option of paying zero royalties to creators, LooksRare will distribute 25% of the protocol fees to creators.
“With this change, LooksRare wants to buck the trend with our solution that actually enforces income for creators, while still remaining attractive to traders with an effectively zero-fee offering. It’s a way to turn all that zero-royalty volume into something that still benefits the creators,” said the pseudonymous LooksRare cofounder known as Guts.
“It’s a smart way to make sure those 0 fee traders can still benefit the projects putting in the work,” tweeted popular NFT collector dingaling.
With so many marketplaces moving to optional royalties, is it only a matter of time before OpenSea follows suit? OpenSea is the biggest NFT marketplace by trading volume, and the OG in the NFT ecosystem. If it decides to move in this direction, it could effectively be over for creators looking at royalties as a revenue stream, at least until some other marketplace with a new business model arises and gains adoption.
Next Tuesday, Unchained will unveil an episode about NFT royalties with creators Sterling Crispin and Holly Herndon, so tune in then! Also, don’t forget to check out our debate on NFT royalties on The Chopping Block.