The NFT market is surging. We are currently witnessing monumental figures – record sales volume, buyers rushing in, and Bitcoin NFTs already making headlines. Amidst this excitement, a critical question lingers: are we building a sustainable ecosystem, or are we sacrificing creator rights at the altar of market efficiency?

Are Lower Fees Worth It?

Immutable (IMX) has undeniably shaken things up. Surpassing Ethereum in sales volume? That's a statement. But there’s no question that their focus on lower fees has clearly attracted users, and thus, driven adoption. Let’s stop right there and get real – nothing is free. The answer is equity. The better question though, is who pays for those artificially low fees.

The dirty secret of this industry is that lower fees usually mean lower royalties for creators. Consider this – platforms have to make up their costs some way. So if transaction fees are reduced, the first and simplest place to look is the cut that goes to the primary creator. But this isn’t just a problem for rich musicians. It affects creators not signed to a major and South Asian artists trying to break into the international market — and all those in between who rely on those royalties to make ends meet.

This feels like a repeat of the early music streaming days. Napster delivered on a dream of free music, and the consumers ran to it. The long-term impact was catastrophic for artists, whose revenues dropped to zero. Are we destined to go through that same cycle all over again, now with NFTs? Is Immutable the Napster of the NFT revolution? I can’t speak to that, but we do need to exercise great caution.

Centralization Erodes Creator Control?

Immutable’s success is predicated, in no small part, on a more centralized structure than Ethereum’s decentralized ethos. This means quicker transactions and reduced fees. It centralizes control. Does this new centralization of power grant Immutable excessive authority over royalty policies?

Now, imagine a situation down the line where Immutable chooses, for any number of reasons, to lower or completely remove royalties on its platform. What recourse do creators have? On a genuinely decentralized system, they’d be able to fork the project and develop a new competing platform with more equitable terms. But on a centralized platform, they’re completely at the mercy of the platform’s decisions.

It all sounds a little too familiar like the old Web 2.0 model. Platforms are taking value away from creators while returning almost nothing of value to them. We were sold on a decentralized, democratizing revolution with NFTs – yet are we unwittingly marching toward a new digital teocracy?

Community Standards Enough Protection?

Immutable emphasizes its community standards. That's great! Yet, are these standards strong enough to truly ensure creator rights are protected, including concerning royalties? A general pledge of “equity” isn’t going to make the grade.

To get there, we need real mechanisms for ensuring that royalty payments are enforced and that platforms aren’t allowed to arbitrarily change the rules of the game. Smart contracts present an exciting opportunity to address some of these challenges, but they should be deployed in a transparent and publicly verifiable manner.

What happens when a platform like Immutable decides that a project violates its community standards and delists it, potentially impacting the creator's income? What happens when those community standards are inherently biased or selectively enforced? These are awkward questions, though vital, to be sure, but ask them we must.

Seeing this incredible recent uptick of NFT sales across the ecosystem, and particularly on Immutable is super exciting. We need to avoid the naïve jubilation that can accompany it. Together, we can make sure that the NFT ecosystem is built on an equitable and sustainable foundation. First, we need to make sure that creators are compensated fairly for their work.

It’s time for us to have a real discussion on NFT royalties. This is why it’s crucial that artists, collectors and the wider community engage with developers and platforms on these conversations. Let’s make sure we’re putting fairness and creator empowerment at the very front of this new NFT revolution. We can’t let the search for market supremacy eclipse these basic tenets. South Asian artists, and creators of all backgrounds, deserve better.

  • The rise of Immutable presents both opportunities and risks for the NFT space.
  • Lower fees are attractive, but we need to understand the potential impact on creator royalties.
  • Centralization raises concerns about platform control and creator autonomy.
  • Strong community standards are essential, but they need to be backed by concrete enforcement mechanisms.

We need a serious conversation about NFT royalties – not just among developers and platforms, but among artists, collectors, and the broader community. Let's not let the pursuit of market dominance overshadow the fundamental principles of fairness and creator empowerment that should be at the heart of the NFT revolution. South Asian artists, and creators everywhere, deserve nothing less.