Mark Cuban called OpenSea's refusal to collect royalties a big mistake

OpenSea's decision to disable its royalty enforcement tool as of August 31 is a big mistake. This was stated by billionaire and investor in the NFT marketplace Mark Cuban.

The entrepreneur saw this move as a decrease in trust in the platform and damage to the industry.

OpenSea presented the solution in November 2022. Operator Filter allows collection creators to blacklist marketplaces that do not charge royalties when reselling assets.

After August 31st, collections that used this feature will be forced to collect fees until February 29th, 2024. After this date, creator royalties will become optional. For new NFTs, this rule will take effect immediately.

According to OpenSea founder and CEO Devin Finzer, the tool did not receive the support in the ecosystem that the team was counting on. According to him, a number of marketplaces like Blur, Dew and LooksRare have bypassed Operator Filter by integrating the Seaport protocol.

“The buyer knows the royalty amount before the transaction. The creator can set this parameter to zero. They are part of the smart contract that creates the NFT.

This is unreasonable. This is desperation,” Cuban commented.

According to the billionaire, the decision will "kill" future dapps that go beyond collectibles, where there will be "the most money."

OpenSea's decision caused a similar reaction at Yuga Labs. The company intends to cease cooperation with the NFT marketplace by February 2024.

“Yuga Labs will begin the process of removing support for the Seaport protocol for all updated contracts and any new collections by the deadline designated by OpenSea,” explained the company’s CEO Daniel Alegre.

The executive emphasized that Yuga Labs believes in protecting creators' royalties so that creators are properly compensated for their work.

Let us recall that in February 2023, the OpenSea team switched the marketplace to an “optional collection” model of royalties and temporarily abolished commissions amid the confrontation with Blur.

In June, the total volume of royalty payments to the creators of NFT collections dropped to a two-year low—almost 1,000 ETH.