The Bored Ape Yacht Club (BAYC) founder has given his opinion about the NFT creator royalties debate and proposed a potential path forward that the team believes is the best.
A blog post published on November 8 by Wylie Aronow, a BAYC co-founder, and co-signed by other co-founders, Kerem Atalay and Greg Solano, revealed that they view creator royalties as “the single most important factor that brought them [creators and artists] into the ecosystem.”
The blog post followed the announcement by OpenSea on November 6 that it will follow the footsteps of other NFT marketplaces regarding royalty enforcement, a move that Aronow states that it shows the platform’s intent “to move with the rest of the herd and remove creator royalties for legacy collections from their platform,” and termed the move as “not great.”
“For as much as NFTs have been about users truly owning their digital assets, they’ve also been about empowering creators.”
The Bored Ape Yacht Club founders have proposed an NFT royalties model that utilizes “allow lists” coded into the NFT collections smart contract. The smart contract facilitates NFT trading between regular wallets, but it only supports NFT trading on marketplaces that support the royalties feature.
A basic version of how this will work was given, and the first step will be to check whether the wallet attempting to initiate a transfer is a regular wallet or a smart contract.
Transfer requests from regular wallets should be allowed, but transfers originating from smart contracts will be checked against contracts that respect royalties. If a match is found, the transfer request will be approved.
With this model, wallet-to-wallet transfer of NFTs will be free, and the Bored Ape Yacht Club founders have emphasized the need to ensure that asset ownership is acknowledged, which is one of the major benefits of NFTs.
However, the BAYC team agrees that this model still comes with a set of challenges, including allowlist maintenance and barriers to entry for new marketplaces, but the allowlist is a bit small.
“To start with, there are only a handful of known good actors today. Starting the allowlist is easy–just add those couple of marketplaces that pay creator fees. Done.”
The allowlist maintenance is the major issue, for now, especially the composition of the governing body.
“The real work is just in figuring out what this governing body looks like. But I think that’s a solvable problem for the NFT ecosystem to take on.”
On November 8, Beeple, a famous NFT artist who sold his NFT for $69.3 million, applauded the new move as a way of protecting creator royalties as most NFT marketplaces overlook them via a tweet. The tweet read:
“Great work @GordonGoner !! I think this could be a great path forward to protect these royalties
though I still think even if this is implemented the switch from seller’s FEE to buyer’s PREMIUM is long overdue and will help a lot with compliance.”