Weekly NFT trading volume, which was over $3 billion at its best, has been hovering below $100 million recently. Falling volumes are dragging NFT marketplaces into a race to the bottom. Adding to this picture is an important decision made by OpenSea the previous day, which drew a strong reaction from the community.

Royalties will be optional

OpenSea announced on Thursday that royalties will now be voluntary. Until now, NFT artists received 2.5 percent of the fee on each sale. Starting August 31, these fees will be optional for new collections. For existing collections, this system will be introduced after February 29, 2024. Thus, the collector who buys the NFT will decide whether or not to give the artist a share in the next sale.

As transaction volumes and interest in the NFT market decline, marketplaces are reducing transaction fees and eliminating royalties to attract users. Blur, which charges a minimum royalty of 0.5 percent compared to OpenSea’s 2.5 percent, has overtaken OpenSea in terms of transaction volume. Eight months ago, another marketplace, X2Y2, also introduced a new model that eliminated royalties.

Devin Finzer (pictured), CEO and co-founder of OpenSea, has previously argued that royalties are necessary to protect artists’ rights. It was also Finzer who announced that the platform would zero out these fees.

“OpenSea is making a big mistake”

OpenSea’s decision resonated widely in the community and the platform was accused of killing the ecosystem. “OpenSea is making a big mistake by not charging and paying royalties on NFT sales,” said Mark Cuban, a famous billionaire and one of OpenSea’s investors, emphasizing that he was saying this as an OpenSea investor.