OpenSea, a leading Non-Fungible Token (NFT) trading platform, has announced its support for the ERC-721C token standard, revolutionizing how creators can implement and enforce royalties directly on the blockchain.
This development enables creators to safeguard their earnings with unprecedented ease and reliability.
Addressing the Challenge of NFT Wash Trading
The ERC-721C standard, developed by blockchain gaming firm Limit Break in May, addresses critical issues surrounding NFT wash trading and the evasion of creator royalties.
Prior to this innovation, it was feasible for users to bypass royalty payments by transferring NFTs through various means, including self-custody wallets or alternate marketplaces that did not recognize creators’ royalty stipulations.
Limit Break’s solution standardizes token transfer conditions, including royalties, ensuring creators receive their due earnings across all platforms. He elaborated in a Medium post that “In the long-run, this allowed for the incentivization of zero-fee, royalty-optional trading with airdrops, effectively turning tokens intended to be non-fungible into proxies for fungible tokens.”
Empowering Creators with Programmable Earnings
With the implementation of ERC-721C, creators on OpenSea now have the power to enforce their royalties through a simple one-click process.
This advancement aligns with the platform’s commitment to fostering a fair and supportive environment for NFT creators.
OpenSea highlighted that the recent Dencun upgrade on the Ethereum network, completed on March 13, was instrumental in enabling support for ERC-721C.
Enhancing Sales and Royalty Enforcement
Following the deployment of an ERC-721C contract on OpenSea, creators retain the ability to list their digital artwork on other marketplaces manually.
However, OpenSea will ensure that the lowest royalties set by the creator on other platforms are matched.
This feature’s integration with OpenSea’s Seaport 1.6 protocol further enriches the NFT trading experience by allowing sales under specific conditions, such as dynamic metadata changes in response to sales volume.
Royalty Standards and Creator Benefits
While creators have discretion over their royalty rates, they typically range from 2.5% to 10% per sale.
The adoption of the ERC-721C standard is poised to significantly benefit creators by ensuring consistent royalty enforcement, contributing to the sustainability and growth of the NFT industry.
According to data, the top 10 NFT collections have accrued over $345 million in royalties to date, underscoring the substantial impact of creator earnings in the digital art and collectibles market.
OpenSea’s support for ERC-721C marks a pivotal step in enhancing the NFT ecosystem, ensuring creators are fairly compensated for their work and contributing to the development of more secure and equitable trading practices.
