Feb 19, 2023
OpenSea Cuts Fees, Enhances Creator Earnings to Regain Dominance
The NFT marketplace OpenSea has announced a major restructuring in the wake of its declining user base and falling market dominance. In response to the rising competition, OpenSea is introducing a number of changes to its platform, including a 0% fee for a limited time, optional creator earnings, and leniency on other operators.
On Feb. 18, NFT marketplace Blur surpassed OpenSea in daily Ether (ETH) trading volume, as users anticipate higher returns on their NFT investments. This shift in user base has forced OpenSea to take action in an attempt to win back its customers.
OpenSea has acknowledged that its attempts to defend creator earnings on all collections have been unsuccessful, citing Blur’s decision to roll back creator earnings even on filtered collections, and the false choice they’re forcing creators to make between liquidity on Blur or OpenSea.
In response to this, OpenSea has announced three major changes to its platform. These include a 0% fee for a limited time, optional creator earnings of 0.5% minimum for all collections without on-chain enforcement (old & new), and marketplaces with the same policies will not be blocked by the operator filter.
The shift in daily trading volume can be attributed to Blur’s new royalty policy, which allows creators to earn royalties on multiple platforms at the same time, whereas OpenSea’s policy prevents collections from doing so. This has highlighted the importance of competition in the industry, as it prevents platforms from increasing fees and hurting creators and collectors.
OpenSea plans to continue testing its model and identify what works best for the community and the organization. Community members have speculated that OpenSea may increase its platform fees in the future if it successfully manages to regain its lost customers.
The crypto community has welcomed the recent appointment of YouTube’s new CEO, Neal Mohan, who has expressed interest in using NFTs and Web3 as revenue streams for creators. In February 2022, Mohan outlined tentative plans to integrate features such as metaverse-based content experiences and content tokenization via NFTs.
The NFT space is rapidly evolving and the restructuring of OpenSea is just one example of the changes taking place. As the industry continues to grow, it will be interesting to see how OpenSea fares against its competitors and if its new measures will be successful in regaining its market dominance.
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