OpenSea’s royalty enforcement tool Operator Filter will be deactivated, according to the NFT marketplace’s founder and CEO, Devin Finzer.
OpenSea is discontinuing its on-chain royalty enforcement tool, Operator Filter, which allowed creators to blacklist nonfungible token (NFT) marketplaces that do not enforce royalties.
The transition will take effect on August 31, according to a statement released by OpenSea founder and CEO Devin Finzer on August 17. The Operator Filter feature was introduced in November 2022 as a “simple code snippet” that could restrict NFT sales to only marketplaces that enforced creator fees.
We launched our Operator Filter so creators could restrict secondary sales to web3 marketplaces that enforce creator fees.
But we relied on opt-in by the entire ecosystem, which didn't happen. So we’re making a few changes to our approach to creator fees. 🧵⬇️
— OpenSea (@opensea) August 17, 2023Finzer stated that the utility had not been as successful as anticipated because it needed more support from the NFT ecosystem.
Finzer asserted that NFT marketplaces such as Blur, Dew, and LooksRare had circumvented the Operator Filter by integrating the Seaport Protocol to bypass OpenSea’s blacklist and avoid paying creator fees. Creators viewed the tool as a threat to their control over where their collections were sold, according to Finzer.
“We have heard from some creators that the Operator Filter limits their sense of control over where their collections are sold, and at the same time may collide with a collector’s expectation of full ownership.”
“The Operator Filter’s restrictions come at the expense of decentralized ownership,” he continued.
Last but not least, Finzer explained that while creator fees are beneficial for specific business models, they are only one of many revenue streams available to creators, and several other use cases of NFT technology must be considered.
Product updates:
– Filter on the collection page & highlight on the item page so buyers can easily find listings that pay preferred creator fees
– Enhanced experience for sellers to choose the creator’s preferred fee or customize the creator fee
— OpenSea (@opensea) August 17, 2023“We’ve dedicated a large part of our roadmap to power new use cases — starting with digital and physical redeemables — and to merchandise those use cases more effectively across primary and secondary experiences,” he said.
The Operator Filter will no longer block any marketplaces as of August 31. Nevertheless, the creator’s favored fees will be enforced until February 29, 2024, for all collections using the tool and existing collections on non-Ethereum blockchains.
“To be clear, creator fees aren’t going away — simply the ineffective, unilateral enforcement of them,” Finzer explained.
A potential Setback For NFT Artists
Some consider the move to be a potential setback for NFT artists seeking passive income. Several members of the NFT community stated on August 17 that collectors should support NFT creators on platforms that require royalties.
However, a Reddit avatar designer believes it may have been the correct decision, arguing that the business model intended to profit excessively from hype trading.
Opensea is caving into pressure from its competitors to kill royalties.
As members of nft communities the best way to impact this royalty problem and support your project is to only use platforms that will support your communities and honor their royalties.
Stop supporting…
— ROCKΞT 🚀 (@RocketEGC) August 17, 2023