Prominent NFT creators such as Yuga Labs, known for Bored Ape Yacht Club and CryptoPunks, as well as the Pudgy Penguins collection, are revisiting their associations with dominant platforms like Blur and OpenSea due to recent reductions in royalties. Reports from Bloomberg suggest that some creators are either pausing new listings or contemplating such actions.
This year, both Blur and OpenSea have substantially cut down the royalties paid to creators for secondary market transactions in an effort to stimulate activity in the declining NFT market. According to data from Nansen, royalties in September reached a modest $2.4 million, a significant drop compared to the peak of $269 million in January.
Yuga Labs has taken a proactive stance by suspending the trading of its latest NFT collection, Mara, on Blur and OpenSea. They have declared that only marketplaces upholding substantial royalties will be granted the privilege of listing their tokens. The company has also revealed layoffs due to the unfavorable market conditions.
In the past, Blur gained prominence in the market with its competitive low-fee structure, surpassing OpenSea and compelling the latter to reevaluate its fee policies. Presently, Blur maintains a base royalty fee of 0.5%, while OpenSea has shifted to optional creator fees. These two platforms together account for roughly 70% of all NFT transactions.
In response to declining royalties, numerous projects have diversified into alternative markets such as gaming or physical collectibles. For instance, Pudgy Penguins have expanded into merchandise sales, generating $7 million in revenue this year, a substantial contrast to the meager $300,000 earned from NFT royalties.
Currently, the top-tier collections from Yuga Labs and Pudgy Penguins collectively constitute an impressive two-thirds of this year's NFT trading volumes. It goes without saying that any potential departure from mainstream platforms is expected to exert a substantial influence on the overall market.
