The much-awaited Ethereum NFT marketplace from Magic Eden and Yuga Labs went live on Tuesday, February 27th, sparking discussion of a revival of creator royalties in the Web3 space.
The marketplace, which features collector pages, a loyalty program via Diamond drops, and other perks, is the first of its kind on Ethereum that mandates support for royalties on the smart contract level. It is a sharp change from other leading marketplaces that have largely done away with creator royalties.
Greg Solano, the new CEO of Yuga Labs and co-creator of Bored Ape Yacht Club, said in a statement that royalties are a “lifeline” that keep creators building Web3 activations that are “fun, weird, and innovative.” In his view, Magic Eden is the first major marketplace to launch a platform that “we can all be proud of.”
Magic Eden bills itself as the leading cross-chain NFT platform, hosting marketplaces for Solana, Polygon, Bitcoin, and Ethereum digital assets. This latest move, along with some retrospective Diamond airdrops, may put it in a position to take market share from other top marketplaces like OpenSea.
Jack Lu, Magic Eden CEO and co-founder, noted all the partnerships that went into building this marketplace, including Yuga Labs, Limit Break, and its Creator’s Alliance. According to him, the future of Web3 includes creator royalties and incentivizing growth within the industry.
To celebrate the launch of the new marketplace, Magic Eden, Yuga Labs, and the Creator’s Alliance have collaborated on a special NFT drop: a commemorative art piece from Clon of Cool Cats. There will be 1,000 total, with 500 randomly dropped to users who transacted on the marketplace in the first month and another 500 to those who pay the most in royalties in the same time frame.
Yuga Sunsets Availability of Collections on Non-Compliant Platforms
In an announcement on Monday, Yuga Labs shared that it was sunsetting the availability of its collections on marketplaces that don’t support creator royalties.
The collections that can no longer be traded on these platforms include some Otherside and 10KTF sets, as well as Sewer Passes from Yuga Labs’ game Dookey Dash. The move doesn’t apply to the company’s popular Bored Ape Yacht Club or Mutant Ape Yacht Club collections, however, which are two of the most traded Yuga collections.
The announcement also states that Yuga Labs is sunsetting support on marketplaces that don’t support royalties for “ALL creators,” which may include even smaller artists or collection showrunners. A screenshot circulating on X showed that the Otherside Koda collection on OpenSea was not available as of yesterday.
Creator’s Alliance Marks Turn in Royalty Battle
Magic Eden’s Creator’s Alliance may mark a turn in the royalty battle, which has raged in the NFT space for over a year. The Alliance, made up of heavy hitters in the space like Yuga Labs, RTFKT, and World of Women, represents a united front from creators who believe royalties are crucial for the growth of Web3.
The goal of the Creator’s Alliance is to promote a sustainable royalty framework, along with fair compensation for creators across the industry. It is a response to major marketplaces making the payment of royalties optional. The two main culprits are Blur and OpenSea, which have engaged in a war to appeal to pro NFT traders, who account for much of the trading volume in the space.
Time will tell if Magic Eden’s Ethereum marketplace and Creator’s Alliance succeeds, but there’s no doubt the company is developing a strong reputation in the space — and in a good way. We’ll follow up with both projects down the road and report back if needed.
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