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Yuga Labs, the creators of the hugely popular NFT collection Bored Ape Yacht Club (BAYC), have announced they will be removing support for OpenSea’s Seaport Protocol from February 2024.
OpenSea has made over $100 million in fees from collections such as Bored Ape Yacht Club, BAKC, Mutant Apes, and other prominent NFT collections.
Yuga Labs To Block OpenSea
Yuga Lab’s decision to block OpenSea comes after OpenSea announced its decision to disable mandatory royalties for existing collections. OpenSea announced a slew of changes in a blog post published on the 17th of August. OpenSea had stated in its update,
“We launched our Operator Filter so creators could restrict secondary sales to web3 marketplaces that enforce creator fees. But we relied on opt-in by the entire ecosystem, which didn’t happen. So we’re making a few changes to our approach to creator fees. Starting on Thursday, the 31st of August, 2023, we’re moving to optional creator fees on OpenSea in an effort to better reflect the principles of choice and ownership that drive this decentralized ecosystem.”
Yuga Lab’s collections on OpenSea comprise nearly $5 billion worth of all-time traded value. Out of this, the Bored Ape Yacht Club alone has generated around $2 billion. The announcement makes Yuga Labs the latest NFT project to come out in opposition to OpenSea’s controversial decision. Yuga Labs CEO Daniel Alegre, stated in a post on X,
“Yuga Labs will begin the process of sunsetting support for OpenSea’s SeaPort for all upgradable contracts and any new collections, with the aim of this being complete in February 2024 in tandem with OpenSea’s approach. “For as much as NFTs have been about users truly owning their digital assets, they’ve also been about empowering creators. Yuga believes in protecting creator royalties so creators are properly compensated for their work.”
A spokesperson for Yuga Labs stated that the company would be moving towards disallowing OpenSea’s marketplace to trade any of its collections as they phase out royalties.
Move Panned By NFT Community
OpenSea’s sudden move has, not surprisingly, angered the NFT and digital art communities, with artists expressing their anger and disbelief at the decision. They have also criticized OpenSea’s lack of respect and appreciation for the creators from whom it had profited off for years. One of the most prominent investors in OpenSea, Mark Cuban, has also criticized the move, posting on X.
“Not collecting and paying royalties on NFT sales is a HUGE mistake by OpenSea. It diminished trust in the platform and hurts the industry.”
The company has also changed its OpenSea Pro fee structure and will be levying a 0.5% fee on listings and offers on the platform starting the 31st of August. At present, the 0.5% listing fee is only applicable in specific instances where the creator royalty is set to below 0.5% or if the collection does not meet specified thresholds.
The move could drive users to Blur, which recently surpassed OpenSea as the leading NFT marketplace by trading volume. Collections such as Bored Ape Yacht Club and CryptoPunks play a crucial role in contributing to the success of NFT marketplaces such as OpenSea. According to data from Ninjalerts, Yuga Lab’s 30-day trading volume is 80% of the size of OpenSea’s at $52.8 million. Meanwhile, OpenSea’s 30-day volume is around $66.7 million.
“Yuga’s 30d volume is 80% the size of OpenSea’s. This is the leverage that IP has over NFT Marketplaces. The NFT Marketplaces are dead without the most important IP Will this lead to walled garden marketplaces by IP owners? That’s much more complicated, so I’m not sure. Distributors can also create walled gardens. Is there any upside for OpenSea to work as an “Authorized Reseller” that maintains royalties for the top IP? Probably? It will be very difficult for these IP creators to make good marketplaces.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.