pNFTs: Metaplex's New Royalty Enforcement for NFTs
Metaplex, one of the top NFT creation tools on the Solana blockchain, has announced that they are further engraining NFT royalties into their framework by creating a new type of token called a programmable NFT (pNFT) which can directly integrate royalties into the metadata.
The development will help assist creators in receiving incentives following a long debate about the necessity for royalties that dominated much of the second half of 2022. While most traders believed that royalties were eating into their profits, it’s become clear that the people responsible for building the various platforms and tokens in the NFT market are still highly interested in new royalty structures created by NFTs.
Royalties Enforcement in NFTs
Enforcing royalties has been a large topic of discussion in the NFT community with platforms like Opensea, LooksRare, and Magic Eden all chiming in with their opinions. Metaplex, being one of the major development tool providers on Solana, plays a vital role in this discussion and has taken the belief that royalties are necessary for NFTs and has subsequently created new options for creators.
The team at Metaplex has created three options for developers to help them integrate royalties into their project, which include the ability to maximize compatibility with different programs, stricter loyalty enforcement through allow list and white list controls, and even incorporating a deny list.
The team has also created something called a “compatibility rule set” that will allow preventing restrictions from stopping pNFTs from being transferred which will make a difference for collection creators that fear their tokens will be traded on platforms that do not enforce royalties.
Compatible Programs in the Ecosystem
To make pNFTs more appealing to creators and traders alike, the team has made sure that pNFTs are compatible with some of the most important protocols in the network including Magic Eden, SharkyFi, and Phantom.
These inclusions by Metaplex mean that the potential for pNFTs to expand and become more common within the Solana network will grow, giving creators more incentives to rejoin the network, which has taken massive losses over the past year.
Considerations for NFT Creators
There are some drawbacks to pNFTs that every creator should consider before switching to the new token. Like most things on-chain, changing an NFT collection to a pNFT collection is irreversible, so it can’t be a decision that is made lightly when considering the possible risks to the entire collection.
Further, pNFTs do more to benefit the creator over the trader, so when switching to a pNFT collection the community might have some issues and become frustrated if done so without their consideration.
Lastly, there are still some tools on the Solana blockchain that are not compatible with pNFTs yet, and it can pose problems for certain NFTs, which rely on other protocols to be fully utilized.
The Future of Programmable NFTs
As it stands, Metaplex is making it clear what its opinion regarding royalties is and is doubling down on its effort to support them. Although this is good for most creators and the integrity of NFTs in Solana, it could irritate the Solana community, which is already reeling from considerable losses.
The Solana network has lost a lot of appeal since FTX’s crash, with major collections already leaving the blockchain for more stable networks. Even worse, the most notable activity on Solana since 2023 started was a goofy meme coin with no real value or utility. Unfortunately, things are not looking good for Solana, and Metaplex’s effort, while beneficial, might not be addressing the most pressing issues at the moment.
