Why are so many NFT marketplaces killing artist royalties?

A large NFT platform recently rebranded artist royalties as “fees.” This is not just semantics – it’s a marketing technique aimed at twisting the narrative in a race to zero.

Nov 11, 2022 Tech

SuperRare Magazine

1 year ago

What the fuck is happening with artist royalties? An integral part of the cryptoart ethos from the beginning, over the last year we’ve seen platform after platform roll back on royalty-related promises made to creators by the cryptoart space. For as long as there has been a market for art, artists had no choice but to sit back and watch their work fetch millions for collectors, galleries, and auction houses through secondary sales, with none of that money landing in their own wallets. The pioneers of cryptoart understood why this was wrong, and they sought to change it–that is the origin of artist royalties: the recognition that artists create value, and that artwork would not exist without them.

Royalties have become standard in music, literature, and other creative fields to honor the role of artists, and the cryptoart revolution brings this concept to the fine art world at last – directly and without need for the likes of galleries or record companies. And yet, perhaps buckling under bear market weight or investor pressure, or just a good old fashioned race to the bottom, we’re now seeing platform after platform that is willing to destroy the fundamental value of artist sovereignty.

The most disheartening part of this most recent brewhaha is the cynical reframing of royalties as “fees”. In July 2022, SudoSwap announced sudoAMM, an on-chain NFT marketplace that exploded in the world of royalty-free NFTs. In a Twitter thread announcing the protocol, they included royalties in the same category as additional fees heaped onto collectors. In the same month, the Solana P2P trading platform Yawww launched an on-chain NFT marketplace, advertised entirely on its royalty-optional status. Since when did decentralization equate to disrespecting the creators creating the space? This isn’t Ticketmaster. These aren’t fees stolen from consumers to line CEOs’ pockets. Decentralization in the arts is about empowering creators to support themselves free from dependence on centralized powers. Moves to abolish creator royalties not only strip artists of their freedoms, but foster an environment where outdated values and old power structures can continue to thrive, now just under a different facade.

Industry pressure speaks volumes, especially in a volatile and competitive ecosystem. X2Y2 went royalty-optional in August, and LooksRare followed in October. Magic Eden, the biggest NFT marketplace on Solana, went the royalty-optional route the same month. On Twitter they said, “this is not a decision we take lightly. We understand this move has serious implications for the ecosystem. We also hope it is not a permanent decision. Today, royalties are not enforceable on chain. We welcome and hope to see new standards that protect royalties.” And certainly, there is some truth to that–if there is no standard, the heaviest hitters can force the market to acquiesce to their personal desires.

“Architects of the Future” by @mattkane

But it is concerning if the wider ecosystem is seriously considering heading in this direction. After X2Y2 made royalties optional, NFTStatistics found that over the course of one month, the number of collectors who opted in for artist royalties plummeted from about 75% to 18%, writing that “the idea of ‘tip jar’ royalties where buyers can opt-in or opt-out will likely prove to just be a 0-royalty policy over time. Free riding is too easy.” An issue that drove artists and creators to the blockchain from the beginning was the way they felt undervalued by the traditional art world, the way the general public expects creative services to be rendered for free. While there is understood value in art, people often don’t ascribe any value to the artist beyond what their name means for the price of resale. Artist royalties changed that. The cryptoart space has always strived to view artists as champions instead of objects. Why should we stop now?

Screenshot of tweet by NFTstatistics.eth

This week, the announcement that OpenSea was going royalty optional, pending an on-chain enforcement tool, shook the NFT world. And with Web2 platforms like Instagram now getting into the business of NFTs, how can we expect them to act in the interest of artists if we don’t set strong precedents for what is and is not acceptable in the space? Artist empowerment has always been the goal. Without it, all of this just becomes lipstick on a pig. OpenSea’s renaming of royalties as “fees” is telling. It’s not just semantics, but a marketing campaign aimed at twisting the royalties debate into a deceptive, if more convenient, narrative. “Fees” convey greed and corporate control. They’re web2’s unconsented, cold hand up web3’s shirt. “Fees” is a word wielded to convince artists to relinquish their hard earned empowerment.

Artist “fees” can fuck right off.