In a move that may be more symbolic than consequential at the moment, leading NFT studio Yuga Labs has announced that it will no longer support marketplaces that do not honor creator royalties.
The decision comes on the eve of Magic Eden’s launch of its Ethereum marketplace on Tuesday.
“Yuga and Magic Eden are taking a big step forward to return us to a creator-led Web3. In sync with the market launch, tomorrow we will end our support for markets that do not support royalties for all creators,” the company said. posted on Monday. “This means that our collections with a royalty filter will only be traded on marketplaces that respect creator royalties.”
The move comes more than a year after Blur managed to capture the majority of NFT trading volume. This success was largely based on the fact that this market distributed generous incentives while introducing a radically reduced royalty structure. OpenSea, the market leader until then, then followed suit, reducing its royalties in hopes of competing with Blur.
The lower royalty structure, coupled with lower transaction volumes for NFTs, led to a significant decline in Yuga Labs’ revenue last year. Then, in November, Magic Eden announced its partnership with Yuga Labs to launch a marketplace for Ethereum NFTs that is contractually obligated to charge royalties to creators.
Bored monkeys and missing mutant monkeys
While Yuga Labs’ announcement may one day prove to be a watershed moment, for now its decision may not have much impact in terms of dollars. The company is not ending support for its two largest collections in terms of transaction volume, Bored Ape Yacht Club and Mutant Ape Yacht Club.
“The vast majority of royalty-generating NFTs from Yuga Labs’ collection fall under the Bored Ape Yacht Club and Mutant Ape Yacht Club brands, which are unaffected by this change,” said Steven Zheng, research analyst at The Block Research. “So, this update doesn’t do much for Yuga Labs in terms of royalty income, but does encourage the team to develop and promote its Otherside collections.”
Yuga Laboratories posted a list collections which, in the future, will only be traded on marketplaces that protect the payment of royalties. The trademarks that Yuga Labs intends to protect include several Otherside Collections, which are linked to the company’s Metaverse platform currently under development, and certain Moonbirds NFTs, a collection recently acquired by Yuga Labs.
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