OpenSea just rolled out their attempted solution to the creator royalty problem. Their solution is what they call the Operator Filter Registry. The registry lets creators specify which address should not be allowed to transfer tokens on behalf of users. Bluntly, this solution creates a blacklist of marketplaces that token owners* cannot use to trade their tokens. From a collector’s perspective, there’s a chance that when you buy an NFT, your ownership will be limited.
OpenSea manages the default registry, and it includes all their main competitors:
I have many friends at OpenSea, and I believe their intentions are pure, truly want to empower creators and are a net positive in the space. But since I first learned about their solutions, I couldn’t shake the feeling that something was off because although the consensus appears to be that this is a good thing, it is very much in complete opposition to the idea of true ownership; one of the core ideas that this space was founded and built upon. Not only does it erode ownership, but it conveniently encourages the creation and adoption of standards that prevent trading in competing platforms.
The general assumption when we buy NFTs is that we own them, they’re our assets, and we can do with them as we please; this no longer applies, now there are hidden “terms and conditions” attached to them. Overall, terms and conditions are fine, but those should be known before the purchase, and I hope OpenSea surfaces the fact that you can’t trade some tokens on certain marketplaces on their UI.
I think royalties should be paid, but not at the expense of true ownership. I believe the Forward Protocol is building a better solution through innovation in their marketplace. Their position is that market makers shouldn’t pay royalties because that will encourage more liquidity, but collectors should pay them, so they make a distinction in their protocol when facilitating trades.
I understand that as the space evolves, rules will change, and we might need to pull away a little bit from the founding principles. It might be necessary to enforce royalties as a potential guarantee of future revenue; enforcement could encourage creators to “go all in” and spend more time creating the spaces and communities we all want. But at the same time, the space is still in its infancy, and I believe strongly in the founding principles of ownership; and for me, at least at a gut feeling it is way too early to start mudding the waters with blacklists.