LooksRare charges a 2% total fee on the sale price, which means that 0.5% of the sale price will now be directed to creators in place of their respective royalty rates
Non Fungible Token (NFT) marketplace LooksRare announced today that it will no longer require traders to pay creator realties on transactions.
LooksRare wrote in a blog post that it will ‘no longer support creator royalties by default’ when traders sell NFTs, it will instead allow buyers to ‘opt-in to pay optional royalties.’ That’s a similar approach to what Solana NFT marketplace Magic Eden did when it announced its own move to make creator royalties optional earlier this month.
LooksRare also said, however, that it will direct 25% of its protocol fee—the fee that it charges sellers to transact their NFTs—to creators. LooksRare charges a 2% total fee on the sale price, which means that 0.5% of the sale price will now be directed to creators in place of their respective royalty rates.
Many NFT creators set a royalty that sees a small amount of any secondary sale—typically between 5% and 10% of the price—automatically sent to the original artist or creator by the marketplace in question. However, these royalties are not fully enforceable on-chain using current NFT standards, creating loopholes that some marketplaces have used to lure traders.
On Ethereum, marketplaces like Sudoswap and X2Y2 have either eliminated or made creator royalties optional in recent months amid the ongoing crypto and NFT bear market.
The effect has been more pronounced on Solana, where leading marketplace Magic Eden—which has about a 90% market share within the Solana network—caved and followed suit after other marketplaces did the same. Many of these moves have just come in the recent weeks, although many NFT artists and creators have pushed back against the ‘race to the bottom’ to reject royalties.
The growth of zero-royalty marketplaces has eroded the general willingness to pay royalties throughout the NFT space, LooksRare wrote in an announcement today. Good news for traders, but with a big downside: the move away from royalties has removed an important source of passive income for most creators.
Along with stripping out required creator royalties and giving creators a share of protocol fees, LooksRare has also shifted its overall trading rewards model to primarily benefit NFT sellers on the platform. Now, 95% of token rewards generated via trading will go towards sellers with 5% going to buyers, in an effort to reduce net trading fees for sellers.
