The prominent NFT marketplace, Open seahas revealed that it is discontinuing its on-chain royalty enforcement tool, Operator Filter, on August 31, following poor support within the NFT ecosystem.
Introduced in November 2022, Operator Filter’s main goal was to enable receivers to block NFT marketplaces that fail to enforce royalty payments – a major industry concern. However, competitor marketplaces such as Blur, LooksRare, and Drew outsmarted the tool via the Seaport Protocol, rendering OpenSea’s royalty and blocklist requirements impotent.
In addition, creators expressed concern that the tool will hinder their dominance over platforms through which they sell their collections, which goes against expectations of full ownership.
However, OpenSea’s new roadmap is dedicated to enabling new use cases for digital and physical collectibles. It ensures that all NFTs in the market are effectively promoted on both primary and secondary platforms. Creator fees “are not going away either”.
The Operator Filter depended on the support of everyone in the ecosystem to be successful. And unfortunately that did not happen.
Additionally, creator fees are just one of the many revenue streams available to creators in Web3. We’ve devoted a large portion of our roadmap to powering new…
— OpenZee (@openzee) August 17, 2023
The aftermath and an ongoing fee enforcement
While the operator filter will end the blocking of all marketplaces on August 31, the fees of ongoing collections using the tool and collections not held on Ethereum blockchains will be enforced until February 29, 2024.
OpenSea’s announcement received mixed reviews. Members of the NFT community seeking passive income shared their disapproval of the platform choice and suggested support for NFT creators on platforms that charge maker fees. Conversely, others find the halt reasonable, suggesting that the business model was overly profit-oriented in relation to hype trading anyway.
Ultimately, the decision to retire the OpenSea Royalty Tool and subsequent moves to market demonstrate the complexity of navigating an evolving NFT landscape. As the ecosystem grows, striking the right balance between monetization, innovation, and creator empowerment is an ongoing challenge for not only OpenSea, but the global NFT community as well.
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