OpenSea, a prominent non-fungible token (NFT) trading platform, has introduced support for the ERC-721C token standard, enabling creators to establish and enforce royalties with greater ease.
In an announcement made on April 2, OpenSea revealed that creators now have the ability to enforce earnings with a single click. The ERC-721C standard, developed by blockchain gaming company Limit Break in May of the previous year, tackles the issue of NFT wash trades by standardizing token transfer conditions, including royalties, across various platforms. Prior to this innovation, users could circumvent creator royalty commissions on secondary markets like OpenSea and Blur by transferring NFTs through self-hosted wallets or other NFT marketplaces that did not adhere to creator royalty requirements.
Explaining the potential long-term impact, Limit Break elaborated in a Medium article that this development could incentivize zero-fee, royalty-free trading through airdrops, effectively transforming non-fungible tokens into proxies for fungible tokens. However, the practice of traders acquiring tokens through NFT wash trades in their own wallets was deemed detrimental to the NFT industry.
OpenSea developers emphasized that compatibility with ERC-721C was made possible only after the Dencun upgrade on the Ethereum network on March 13. By following the prescribed steps to enforce creator earnings, sales will be exclusively supported on OpenSea and other marketplaces powered by the LimitBreak payment processor, according to the platform. Although creators can still manually list their digital artwork on other platforms after deploying the ERC-721C contract on OpenSea, the platform will also honor the minimum royalties set by creators on other platforms.
Furthermore, the feature seamlessly integrates with OpenSea’s Seaport 1.6, enabling NFTs to be sold under specific conditions, such as altering metadata based on sales volume. While the determination of NFT royalties primarily lies with creators, these royalties typically range from 2.5% to 10% of each sale. Since their inception, the top 10 NFT collections have amassed over $345 million in royalties, highlighting the significant potential for creators to generate earnings through this mechanism.
