OpenSea, a non-fungible token (NFT) trading platform, has added support for the ERC-721C token standard, allowing creators to set and enforce royalties.
According to the April 2 announcement, creators on OpenSea can now enforce earnings with one click. Launched in May last year by blockchain gaming company Limit Break, ERC-721C solves the problem of NFT wash trading by standardizing token transfer conditions (e.g., royalties) across all channels. Prior to their launch, users could easily bypass creator royalty commissions on secondary marketplaces such as OpenSea and Blur by transferring NFTs through self-custody wallets or even other NFT marketplaces that don’t respect creator royalty requirements.
“In the long run, this can incentivize zero-fee, royalty-free transactions through airdrops, effectively turning non-fungible tokens into proxies for fungible tokens,” he saidLimit Break explained in a Medium article, adding that “traders earn tokens by doing NFT wash transactions in their own wallets, which is bad for the NFT industry.” ”
According to OpenSea developers, compatibility with ERC-721C was only enabled by the Dencun upgrade on the Ethereum network on March 13. “If you follow the steps above to enforce creator earnings, sales will only be supported on OpenSea and other marketplaces powered by the LimitBreak payment processor,” the platform said. After deploying the ERC-721C contract on OpenSea, creators will still be able to manually list their digital artwork on other marketplaces, but OpenSea will also match the minimum royalties set by creators on other platforms.
The feature is also compatible with OpenSea’s Seaport 1.6, which programs NFTs to be sold only under certain conditions, such as changing metadata based on sales volume. Although largely at the discretion of its creators, NFT royalties typically range from 2.5% to 10% per sale. Since its inception, the top 10 NFT collections have earned over $345 million in royalties.