The nonfungible token (NFT) space has become a proven gateway to help users take their first steps into the Web3 space. This is especially true when it comes to artists and creators using Web3 tools to enhance their work.
However, new data from eBit Labs and the LiveArt marketplace reveal that the loss of creator royalties over the past year in the NFT space may be higher than previously thought.
According to the data, after the emergence of the Blur market in October 2022, two famous NFT collections – Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) – experienced a shortfall in royalties of about $20 million.
New data involving the BAYC and MAYC shortfalls then showed the previous estimate of a $35 million shortfall in royalties was likely too small.
Creator royalties have been a topic of great discussion in the NFT space. After briefly suspending creator royalties and then receiving strong backlash from the community, the OpenSea marketplace said it would apply creator royalties to all listed collections.
Back in November 2022, the founders of BAYC proposed a new model for NFT creator royalties, which would keep NFT transfers between wallets free.
Back in September 2022, MagicEden, another prominent NFT marketplace, defended its own NFT royalty enforcement tool. The tool gives creators the ability to flag NFTs or obscure their images if a listing or trade violates royalty rules.
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However, Boris Pevzner, co-founder and CEO of LiveArt, said that despite the Web3 ecosystem touting itself as a “creator-centric space,” new data shows the reality falls short of this promise.
“The lack of 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 artists away from wanting to participate in the industry, “the space will lose its creative spirit and become like a stock market.”
Pevzner’s market war refers mainly to Blur’s market entry into the scene, which targets OpenSea’s market share.
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