Solana Sunday: Magic Eden's Commitment to Royalties
Since earlier this summer, royalty structures and fees have been at the center of an ongoing debate among NFT creators and collectors. The market for NFTs has taken a significant nose-dive following the collapse of TerraLUNA, which resulted in a summer filled with cheap tokens and plagiarized art.
Calls to abandon NFTs royalties have grown louder because many traders believed that the fees taken from royalties are preventing them from earning a profit during a depressed market.
Subsequently, a surge of secondary marketplaces began expressing their opinions on the matter and either removed royalties from their marketplaces or doubled down on protecting creator’s fees.
Magic Eden, the most popular NFT marketplace on the Solana network, is the latest to express their thoughts on royalties, stating that they will continue doing everything they can to ensure that creators earn a percentage of secondary sales with their Open Creator Protocol (OCP).
What is the Open Creator Protocol?
OCP is a protocol that developers on the Solana network can use when building NFT projects. When used, the protocol ensures that NFT collections will include royalty fees by banning the token from being listed on marketplaces that prevent royalty fees from being sent to creators.
The protocol is also free and open source which allows creators to improve the protocol themselves. This means that creators will not be forced to follow a protocol that is solely beneficial to Magic Eden. Instead, the protocol can be molded to fulfill a variety of different purposes as NFT utilities continue to evolve.
Open Creator Protocol Features
The OCP has a list of additional features that will help create unique patterns for NFT collections in the future. Many of these features relate to floor prices and dynamic royalty fees that can fluctuate with daily changes that every NFT collection tends to go through.
One of the most interesting features is how the protocol can burn and re-mint a collection so that existing NFT collections can take part in the royalty enforcement. It allows some of the most popular Solana NFT collections, such as Solana Monkey Business and Okay Bears, to retain their royalty frameworks in order to continue benefiting the creators.
However, it is not required to participate in these new royalty systems. Magic Eden also announced that the royalty options within the OCP are entirely optional so that collections that don’t want to utilize royalties, such as y00ts, will not have to use them, giving more freedom to creators to continue building projects that match their visions.
Web3 and Open Source
Moreover, by choosing to make the OCP open source, Magic Eden is showing their dedication to decentralization. Open source code is often a community-driven process and is not controlled by a single authority. Bitcoin, for example, has been open source since its conception, allowing for the lightning network to grow.
Web3 aims to solve many issues from web2 (such as data silos that sell private data as a product) by distributing information across the internet on decentralized protocols. With open source coding, managing these networks becomes much more realistic because it is accessible to everyone and - without any central figure or entity leading the network - is necessary for scalable innovation.
