Even OpenSea’s CEO, Devin Finzer, is betting big on the NFT “comeback.” In fact, $3.2 billion big—the peak weekly trading volume. In doing so, he makes it sound all rosy and optimistic regarding digital ownership. I think a storm is brewing, powered by the slow and painful demise of NFT royalties, with OpenSea taking a strong hand in that business.

Royalties: Creator Blood, Ecosystem's Life

Let's be blunt: without sustainable royalties, the NFT ecosystem is a house built on sand. Empowering creators It’s a system that disconnects and exploits—not empowers—creators. As Finzer puts it, NFTs could be “the infrastructure that we need.” What sort of cultural infrastructure do we create when artists can’t make a living creating the cultural products we all find inspiring?

We've seen the numbers. That’s a 97% decline in trading volume from that high-water mark. He tries to blame meme coins. Okay, yes, they’re shiny and distracting, but the true crime? Creators are losing faith. Why bother with custom designs or real artistry when the marketplaces are rewarding buyers for finding ways to get around royalties. It’s as if they went and built this stunning new cathedral and then took away the collection plate.

The potential of NFTs has always been in direct creator empowerment. It was all about eliminating the middlemen and letting artists get directly paid—in full—for their work. The race to the bottom on fees marches on. This trend, accelerated by OpenSea’s tests with optional royalty payments, has profoundly compromised this fundamental principle. It’s a tragedy, hidden behind the shiny delusion of a “comeback.”

The Unexpected Connection? Medieval Patronage

Think about the Renaissance. Artists such as Michelangelo weren’t just making immense works of art because they were nice guys. They had patrons – wealthy people and institutions who commissioned and paid for their work. Royalties, like the NEA, are the modern-day equivalent of patronage. They should be, as they’re the lifeblood that allows creators to continue creating.

What happens when the patrons disappear? What happens when the Medici family realizes they’re not that interested in funding art anymore? The art doesn't stop, but it shifts. It becomes smaller, more desperate, more commercial. Is that what we want NFTs to be in the future? A future where we leave creation to the privileged few and the rest of us fight over the meager crumbs?

OpenSea’s big bet on OS2 and on-chain trading is therefore really interesting, but misses the mark entirely on this point. Creating a smarter marketplace is worthwhile, but it doesn’t make a difference if the economic incentives that underlie the marketplace are fundamentally flawed. It’s akin to designing a new supercar when the highway system is falling to pieces underneath you.

Forgotten Voices: South Asian Artists' Struggles

I have a personal stake in this. As someone connected to the South Asian community, I've seen firsthand how artists are struggling to navigate this changing landscape. All of them are lured in by the siren song of global distribution and direct-to-creator monetization that NFTs purport to offer. There’s a deep-seated sense of betrayal and disillusionment by the reality of falling royalties. The myriad challenges that people face when entering the crypto world compound this frustration.

These are the creative visionaries who have the most to contribute yet typically lack the time, money and networks to overcome their far larger counterparts. They rely on royalties to survive. And when those royalties go away, so do their dreams. Where is the inspiration and creativity when these makers have to give up on their dream? Where is the justice when they are excluded from receiving adequate payment for their labor?

We need to amplify these forgotten voices. So now we need to push back against these marketplaces and require them to focus on compensating creators as the first—not the last—priority. It’s going to take all of us to create a more equitable, sustainable ecosystem that better serves independent artists of all stripes.

Beyond the Hype: A Call to Action

Finzer specifically cites the popular Counter-Strike skins as a successful case study and discusses how NFTs can change gaming as we know it. Jesse touches on how NFTs can symbolize real-world objects and how they fit into the concept of digital identity. Now, all of this is GREAT but it’s for naught if we can’t get the royalty issue fixed.

OpenSea’s $3.2 billion bet could still pay off in foot traffic. If that comes at the expense of creators, it’s a hollow victory. Let's not be fooled by the hype. Let's build a future where NFTs truly empower artists and drive innovation, not just enrich a few at the top. The fate of digital ownership hangs in the balance.

  • Advocate for on-chain royalty enforcement: Make royalties a fundamental part of the smart contract, not an optional add-on.
  • Support marketplaces that prioritize creators: Vote with your wallets and support platforms that are committed to fair compensation.
  • Educate buyers about the importance of royalties: Help them understand that paying royalties is an investment in the future of the NFT ecosystem.
  • Demand transparency from marketplaces: Hold them accountable for their policies and their impact on creators.

OpenSea's $3.2 billion bet might pay off in terms of trading volume. But if it comes at the expense of creators, it's a hollow victory. Let's not be fooled by the hype. Let's build a future where NFTs truly empower artists and drive innovation, not just enrich a few at the top. The future of digital ownership depends on it.