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OpenSea to disable royalty enforcement tool “Operator Filter”

OpenSea, a marketplace for nonfungible tokens (NFTs), is discontinuing its on-chain royalty enforcement tool known as Operator Filter. This tool allowed creators to prevent their NFTs from being sold on marketplaces that didn’t uphold royalty payments. The change is scheduled to come into effect on August 31, as communicated by Devin Finzer, the founder and CEO of OpenSea, in a statement on August 17.

The Operator Filter feature was initially introduced in November 2022 and was essentially a “simple code snippet.” Its purpose was to limit the sale of NFTs to only those marketplaces that ensured proper payment of fees to creators.

However, according to Finzer, the tool did not achieve the desired success due to lack of support within the NFT ecosystem. He revealed that certain NFT marketplaces like Blur, Dew, and LooksRare found ways to bypass the Operator Filter by integrating the Seaport Protocol, thus evading OpenSea’s blacklist and sidestepping creator fees.

“We’ve dedicated a large part of our roadmap to power new use cases — starting with digital and physical redeemables — and to merchandise those use cases more effectively across primary and secondary experiences,” he said. “To be clear, creator fees aren’t going away — simply the ineffective, unilateral enforcement of them,” Finzer added.

Furthermore, creators expressed resistance to the tool, viewing it as an infringement on their control over where their collections were made available for sale.

Starting August 31, the Operator Filter will no longer impose restrictions on any marketplaces. For collections already utilizing the tool and for existing collections on blockchains other than Ethereum, the preferred fees set by creators will remain mandatory until February 29, 2024.

Here are the reasons stated by Opensea for why the Royalty Enforcement tool didn’t work out.

  1. The Operator Filter depended on support from everyone in the ecosystem to be successful and that just didn’t happen
  2. Choice on creator fees is important for both collectors and creators
  3. Finally, and perhaps most importantly: Creator Fees are just one of many revenue streams available to creators in web3, and our role in this ecosystem is to empower innovation beyond a single use case or business model

Source: Opensea Blog

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