The Non-Fungible Token (NFT) space has proven to be the gateway that helps users take their first steps into the Web3 space. This is especially true as artists and creators use Web3 tools to enhance their work.
However, new data from eBit Labs and LiveArt Marketplace suggests that the loss of creator royalties in the NFT space over the past year may have been higher than estimated.
Two major NFT franchises Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) were left with an estimated $20 million shortfall in royalties alone after the Blur marketplace came out in October, according to the data. New data involving BAYC and MAYC shortfalls suggests that the previously estimated $35 million royalty shortfall may be too small.
Creator royalties have been a big topic of discussion in the NFT space. After a brief moratorium on creator royalties and subsequent backlash from the community, the OpenSea marketplace said it would charge creator royalties on all listed collectibles. Back in November, BAYC’s founders proposed a new NFT creator royalty model that would make transferring NFTs between wallets free.
Back in September, another well-known NFT marketplace, MagicEden, defended its NFT royalty enforcement tool. The tool enables creators to tokenize NFTs or blur images if listings or transactions bypass royalty rules. Still, LiveArt co-founder and CEO Boris Pevzner said that while the Web3 ecosystem bills itself as a "creator-focused space," new data shows reality isn't delivering on that promise.
"The shortfall in royalties clearly shows that the current system is not working as it should."
Pevzner went on to say that if the NFT market wars drive back artists’ willingness to participate in the industry, “the space will lose its creative spirit and become more like the stock market.”
The market wars that Pevzner mentioned mainly refer to the emergence of the Blur market, targeting OpenSea's market share.
