Since the peak of NFT royalties over the past year, they’ve fallen off a cliff—down by a shocking 75%. Let that sink in. Three-quarters of the revenue supporting digital creators is vanishing at lightning speed. At the same time, OpenSea, the industry’s largest player, does nothing to help, actively contributing to the industry’s collapse. It’s more than just dollars. It’s not just about protecting the future of digital art per se, it’s about building the future kind of ecosystem we want to see.

Why Royalties Matter So Much

Forget diamond-encrusted apes for a second. Think about the struggling artist in Bangladesh, the coder in Nigeria, the musician in Brazil – all leveraging NFTs to reach a global audience. Royalties are their lifeline. They’re not simply “supplemental income”, they’re the sole source of income for many. They do incentivize creators to keep creating. This inspires them to experiment more radically, to uplift, and to connect with their communities.

Royalties create an incentive to keep the product updated and relevant, paving the way for a robust, dynamic digital ecosystem. Take those away, and the motivation to continue building and caring for a dynamic community evaporates. It’s the difference between a pop star flash-in-the-pan and a longer-term music business. I’m experiencing this first hand as I help produce and build bridges between South Asian content creators and the global nuclear crypto community. To most of them, NFT royalties are a form of income and financial freedom that was once out of reach. Seeing that path crumble is heartbreaking. This isn’t just an issue of financial literacy, this isn’t just an empowerment of individuals and communities through the use of decentralized technology. OpenSea’s inaction directly undermines that mission.

NFTs, at their core, are about redefining value. Royalties are an important piece of that reimagining. These provisions ensure that creators keep getting paid when their work becomes more valuable and is resold to someone else. Tossing out royalties rips the core out of the system. What’s left in its wake is a charred nook brimming with baseless conjecture and get-rich schemes. It's like taking a percentage of a musician's earnings every time their song is played on the radio – oh wait, that already happens! It's called copyright law, and it exists for a reason: to protect creators and incentivize creativity. Yet, why should the digital world be any different?

OpenSea's Role In This Tragedy

OpenSea could be leading the charge to protect royalties. They’ve got the clout, the market share, and the money. Instead, they’ve mostly sat on the sidelines while other marketplaces have tested out optional royalties or even no royalty at all. Their messaging has been unclear, their enforcement non-existent, and their overall attitude – shall we say passive complicity.

Think about it: OpenSea generates significant revenue from transaction fees. A healthy landscape of independent creators, empowered by royalties, makes their bottom line work. So why the hesitation? Why the fear to disavow outright? Is it simply fear of losing market share to those platforms that are willing to do more on fees? Is this just a mistaken impression that optional royalties are inherently “more decentralized”?

The unfortunate truth is that this race to the bottom has been spurred on by OpenSea’s inaction. This would explain why collectors are, unsurprisingly, attracted to platforms that allow them to skirt paying royalties. Creators, desperate to make sales, are forced to list their work on these platforms, effectively waiving their right to compensation. It’s a terrible cycle very few can afford to be in, and one only OpenSea can fix. They could implement mandatory royalties, develop better royalty enforcement tools, or simply use their platform to educate users about the importance of supporting creators. They've chosen not to.

OpenSea enables trustless interactions between buyers and sellers utilizing smart contracts. What use is a smart contract if it can’t ensure the most fundamental right of the creator, i.e. that they be paid? It’s as if you could buy a great car, but you’d have to find your own engine. It’s a pretty picture, but it doesn’t lead to any real place.

What Can Be Done To Save Royalties?

Okay, enough complaining. What can we do? What can OpenSea do?

There are some key things OpenSea needs to take responsibility for and lead on. They should make public, legally-binding commitments to protect creator royalties and take meaningful policy action to back those commitments. This could include:

  • Mandatory Royalties: Implement mandatory royalties across all collections. Yes, there will be pushback, but it's the right thing to do.
  • Royalty Enforcement Tools: Develop better tools for enforcing royalties on-chain, making it harder for platforms to circumvent them.
  • Education and Advocacy: Use their platform to educate users about the importance of supporting creators and the value of royalties.

Second, we—the community—need to hold OpenSea’s feet to the fire. We need to demand more from them. We must reward the platforms that do defend creator royalties. It’s time to elevate the voices of our creators who are being hurt by this callous downturn.

Third, let's look at alternatives. Beyond traditional marketplaces, web3 platforms like Zora are experimenting with innovative royalty models that will help provide a more sustainable future for creators. We need to support these platforms and encourage them to continue innovating.

This isn't just about the money. But it’s more than that — it’s about the values that have underpinned the entire NFT ecosystem. Do we want a capital allowing producers most reward imagination and novelty of subset, or one that rewards speculative plays and quick returns. The choice is ours.

OpenSea, the ball is in your court. Sign our pledge of support! Will you stand with the artists and creators and help us defend NFT royalties? Or will you assert yourself and be complicit in their death? The future of digital art is at stake.