The Death (And Rebirth) Of NFTs
Article source, here.
TL;DR
When NFT royalties stopped being enforced as standard by the big marketplaces (Blur, OpenSea, Magic Eden etc.), it killed a certain business model within the NFT space.
It was a model that allowed creators/businesses to release NFTs for free, or at the very least at an affordable price, and make up the difference through royalties.
Adding insult to injury, it also incentivized established businesses to avoid adopting blockchain based NFTs.
Instead create their own 'NFT-like' digital collectibles that can only be traded on their platforms, and enforce royalty fees as standard.
In fact, that's exactly what Roblox has just done, launching what it's calling 'Limiteds,' which are NFT-like collectibles that users can create, trade, and earn royalties on.
Full Story
We'll be the first to admit it: that headline is a little dramatic.
A more accurate title would have been:
'The loss and return of one of NFT technology's best features.'
But that's clunky - and it has no ring to it!
Either way, here's what we're trying to get at:
When NFT royalties stopped being enforced as standard by the big marketplaces (Blur, OpenSea, Magic Eden etc.), it killed a certain business model within the NFT space.
It was a model that allowed creators/businesses to release NFTs for free, or at the very least at an affordable price, and make up the difference through royalties.
Adding insult to injury, it also incentivized established businesses to avoid adopting blockchain based NFTs - and instead create their own 'NFT-like' digital collectibles that:
Can only be traded on their platforms.
Enforce royalty fees as standard.
Where collectors don't actually own the platform-specific 'NFT lookalikes,' but rather get to 'borrow' them, as long as they use the platform.
They leave the platform → they lose their collectibles.
In fact, that's exactly what Roblox has just done.
The game just launched what it's calling 'Limiteds,' which are NFT-like collectibles that users can create, trade, and earn royalties on.
Difference is: they can't be taken outside of Roblox. They're siloed to the platform.
Which sucks. But honestly - we get it!
Why would Roblox opt for a system that hurts its creators, while benefiting a third party platform like Blur or OpenSea?
The good news is: there's light at the end of the tunnel!
Turns out there's a way to bring enforced royalty payments back to NFTs, by hard coding the requirement into the smart contract that creates them.
While it's still early days, it's hard to imagine a future where hard coded royalties don't become the new standard.
Meaning recurring earning power will be returned to creators, and platforms like Blur & OpenSea will need to carve out new competitive edges.
Nice!