Feb 19, 2023
OpenSea Cuts Fees to Counter Falling Dominance
In the ever-expanding world of non-fungible tokens (NFTs) and Web3 technologies, OpenSea, a major NFT marketplace, recently made some major changes in order to remain competitive and attract users. On Feb. 18, NFT marketplace Blur surpassed OpenSea in daily Ethereum (ETH) trading volume, leading OpenSea to introduce a 0% fee for a limited time, introduce optional creator earnings, and be lenient on other operators.
OpenSea’s new measures are an attempt to revitalize its dominance in the space, as users are looking for a trading arena that works in their favor. OpenSea admitted losing users to other “NFT marketplaces that don’t fully enforce creator earnings,” and the new measures are an attempt to win back its migrating customers.
The NFT marketplace Blur’s daily trading volume supremacy can be attributed to its new royalty policy showcasing differences in royalty payment options between its platform and OpenSea. Blur’s policy prevents collections from being able to earn royalties everywhere, limiting creators to earning royalties on only one platform at a time.
OpenSea believes that it defended creator earnings on all collections while reiterating its support for Operator Filter — a function that was aimed at helping creators secure their revenue for the resale of their work. However, this filter proactively blocked recommendations of marketplaces that sported the same policies.
Amid the royalty war between the two marketplaces, community members highlighted the importance of competition in the industry. If it wasn’t for zero royalty marketplaces, bigger players like OpenSea would eventually increase fee structure, which would have a negative impact on creators and collectors.
OpenSea plans to continue testing the model and identify what works best for the community and the organization. Community members speculate that OpenSea would probably increase its platform fees in the future if it successfully manages to amass its lost customers — a predatory move often noticed in industries with less competition.
The crypto community has also been encouraged by YouTube’s appointment of new CEO Neal Mohan, who is known for his inclination to use NFTs and Web3 as revenue streams for creators. Mohan outlined tentative plans in February 2022 to integrate features such as Metaverse-based content experiences and content tokenization via NFTs.
This news and OpenSea’s new initiatives demonstrate the potential of NFTs and Web3 technologies as a viable way to promote, market, and sell NFTs. OpenSea’s changes highlight the importance of competition in the industry and the need for a variety of options when it comes to NFT marketing and promotion. With the right tools and strategies, NFTs and Web3 can be a powerful tool for creators looking to monetize their work.
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