Magic Eden had been the most dominant NFT marketplace on Solana over the past year, typically owning 90% or more of market share at any given time

Magic Eden, the most popular marketplace for Solana NFTs, announced late Friday that it would no longer strictly honour creator-set royalties on NFTs sold through its platform, bowing to recent pressure as royalties-shunning rivals rapidly stole away its market share.

After some difficult reflection and discussions with many creators, we’ve decided to move to optional royalties, the platform tweeted. Magic Eden also said that it would waive its platform fees during a promotional period, in an apparent bid to win back traders.

Magic Eden had been the most dominant NFT marketplace on Solana over the past year, typically owning 90% or more of market share at any given time. The startup rode that momentum to a $1.6 billion valuation in June, just nine months after launching the platform, as it raised $130 million in Series B funding.

However, upstart marketplaces that opted not to require sellers to pay creator royalties on secondary sales—such as Hadeswap and Solanart—began cutting into Magic Eden’s dominance in recent weeks, prompting action from the platform.

Last week, Magic Eden said that it had partnered with Coral Cube, another marketplace and aggregator, to enable Solana NFT transactions with optional royalties while still keeping full creator royalties in place on Magic Eden’s own marketplace.

But on Friday night, Magic Eden tweeted that it had changed its mind, and would be following the rising trend of Solana marketplaces letting users bow out of paying royalties to artists and creators of NFT projects.

This is not a decision we take lightly. We understand this move has serious implications for the ecosystem, Magic Eden tweeted. We also hope it is not a permanent decision. Today, royalties are not enforceable on-chain. We welcome and hope to see new standards that protect royalties.

In support of that noted desire, Magic Eden announced a hackathon initiative to inspire Web3 builders to develop NFT technology and standards that can make creator-set royalties fully enforceable on-chain. Magic Eden will award up to $1 million in prize money, and Solana co-founder Anatoly Yakovenko is among the judges for the hackathon.

Typically, in an NFT marketplace transaction, the seller pays the set royalty fee to the project creator. However, Magic Eden has approached it differently, putting the onus on the buyer in each transaction to choose whether the royalty is paid or not. By making it possible to not pay the royalty, it’s treated more like a tip to the creator.