Author : Mark

Date : Dec 01,2022

The NFT market leader discusses creator royalties in the Solana NFT market and the advantages of decentralization.

The recent bankruptcy of the cryptocurrency exchange FTX has caused an epidemic that is sweeping the sector. Beyond specific users, many businesses have disclosed their connection to FTX, such as the cryptocurrency lending service BlockFi, which on Monday filed for Chapter 11 bankruptcy protection after stopping customer withdrawals.

In a recent interview with Decrypt, Devin Finzer, CEO and co-founder of prominent NFT marketplace OpenSea, called the demise of FTX a "tragic occurrence." He said, "We're still sensing the collateral damage throughout the space." It is without a doubt a setback for cryptocurrency.

This is really a chance to invest in solid, ongoing trust with consumers, I think for the larger crypto ecosystem and for NFTs in particular, Finzer added.

Finzer's remarks come amid discussion over OpenSea's declaration that it will keep enforcing creator royalties on NFT sales, in response to efforts made by certain competing marketplaces to reject royalty rates. Participating markets automatically provide royalties to NFT project developers, which are typically set at 5% to 10% of the secondary selling price.

Even though OpenSea has always paid out royalties, it announced earlier this month that it was looking at other alternatives in light of the industry's transition. Ultimately, OpenSea promised to keep paying royalties after receiving an overwhelmingly positive reactions from NFT developers. As Decrypt reported last week, Finzer cited the action as crucial to preserving creator trust.

He added that decentralization also contributes to this. When users advertise and trade NFTs on OpenSea, it does not assume custody of their assets, although other NFT marketplaces do.

Rival platforms and other Web3 builders have attacked Magic Eden, the leading Solana NFT platform, for holding listed NFTs in an escrow wallet, which some have deemed unsafe. Assets were also taken into custody by FTX's NFT marketplace, and because the FTX empire is through bankruptcy proceedings, their legitimate owners may no longer withdraw those NFTs.

"In reality, we run on a network of decentralized smart contracts. We do not hold users' money or NFTs in trust, according to Finzer. And so, compared to a central authority where things are much more opaque, that kind of arrangement has a lot of advantages.