Original post by WhiteForest, Alex@Foresight Ventures
On August 26, the NFT trading platform X2Y2 issued a document announcing the launch of the "custom royalty" function, which means that buyers can choose not to pay royalties to the project party. It caused some heated discussions. In fact, X2Y2 is not the first person to eat crabs. When Sudoswap is released in April 2021, there will be no royalties and no transaction fees. Both OKX NFT and Element have also tried not to charge royalties.
Elimination of royalties is the general trend
Under stock competition, any industry will start a price war. The Marketplace does not have strong barriers other than traffic and brand, and the products are not sufficiently differentiated. The cost war is an inevitable means of competition. Before customizing royalties, many platforms have already revolutionized themselves to reduce transaction fees.
Why self-defined royalties spark controversy is nothing more than different interested parties in order to safeguard their own interests.
There must be a relatively long-term view that cracking down on the passion of creators will affect the foundation of the NFT industry, and it will be the last thing to do. I don't think this point of view is entirely wrong.
From the perspective of artistic creation, Van Gogh, Schubert, Rembrandt and other masters are all poor, and we can't find a positive correlation between wealth and creative level.
Is it reasonable that royalties are often as high as 10%, and whether it will reduce the level of creativity. But I still agree that reasonable rewards should be given to creators.
Why free mint became popular this year, because these NFTs can no longer attract real consumption and can only profit from transactions. Truly valuable works of art should not be afraid of price wars, and their purpose should be to sell at a higher unit price rather than to increase the frequency of transactions.
Let me briefly disassemble the psychology of the three parties involved:
Project side: After free mint, a lot of income was lost after the cancellation of royalties, which affected continuous creation.
Marketplace: Reducing the cost of intermediate links is conducive to acquiring more users and seizing market share.
Users: Selling NFT can get more income.
It can be seen that the abolition of royalties is beneficial to both parties. Even if it is true that the long-term suppression of creator passion is true, I don't think it will stop the trend of eliminating royalties. **Because the market will advance in the direction of least resistance under the joint efforts of the participants. **Even if there is no X2Y2 and Sudoswap to cancel the royalties, there will be other platforms that will start this shot. Because under the cruel competition, if you don’t cancel the royalties, if others cancel the royalties, then you will be robbed of your share. As a platform, what long-termism do you take if you go bankrupt. Most users don't really care about creators, users only care about whether they can make more money.
This kind of competition pattern is very similar to the "Hundred Regiments War" back then. Price wars and even subsidy wars are also not conducive to long-termism. But the final result is that "bad" coins drive out good coins, winners and losers, Meituan breaks out of the encirclement and rebuilds order.
What do you think of the platform where the project parties jointly resist the cancellation of royalties?
I don't think it's possible to succeed.
Can you ban a platform in the contract, can you ban a steady stream of platforms? Opensea acquired Gem, and Gem is willing to integrate royalty-free sudoswap.
The project party is not monolithic. Most blue chips have many sources of income, and they are confident in the long-term price, and they will not object to no royalties. 9Gag, the founder of the famous project memeland, tweeted: Revenue is more than royalty. The project party should be brave enough to find income other than royalties, instead of always staring at the one-acre three-point field in their hands. Holders are your loyal believers. It should not be your source of income.
In homogeneous products, users will also independently choose the project party that is willing to be free of royalties.
NFT self-built platform? Forget it, this is not a digital collection.
Waking up for Creator Economy
What is the NFT narrative we talked about at the beginning? Break the monopoly of intermediary platforms on resources and release more talents of creators.
We look at this issue dialectically.
Trading platforms have reduced transaction fees one after another, which is completely in line with the original intention of NFT. If the trading platform that cancels the royalties is an unjust teacher, then is the project party that charges 10% royalties an unjust teacher? Isn't lowering royalties lowering the cost of intermediate links?
X2Y2 this time is not directly canceling the royalties, but customizing the royalties. If the seller really thinks that the royalties are reasonable or is willing to support the project party, they can choose to pay 100% of the royalties, and even the platform can provide the option to pay more than 100%. We can wait and see the user's choice, this is the general trend of the market.
If we look at the industry more realistically.
What is the background of most NFT project parties at present, whether they are artists, investors, or speculators. Are these royalties incentivizing artistic creators?
How many participants or traders in the Creator Economy market are here to support artistic creation? How much creative background, artistic genre, and author information can the holders tell?
How long can so many Creator Platform narratives float.
To make money is to make money, not to be ashamed.
Since it cannot be changed, where is the project going?
For NFT project parties who have lost their royalties, the remaining road will be more difficult, but this does not mean that there is no way out. The project party should pay more attention to building its own brand, monetize through IP, and actively bind its own interests with those of the holders, and convert the existing copyright fee system into an IP monetization system in order to get out of the copyright dilemma .
When issuing NFTs, 10% of NFTs are reserved in the treasury, and when the price of NFTs rises to a certain level, they can be sold and realized in the market.
Retain the brand IP rights of NFT, and actively participate in market-oriented operations and commercial realization.
Summarize
Summarize
Dreams are still necessary, after all, people still prefer to live in dreams than the naked reality.
