NFTs have had their heyday, but that’s now a thing of the past, especially when it comes to creator payments.
NFT market down, payments tumble
2021 marked a decisive turning point in the future of NFTs. Just when everyone was seeing them reaching new heights, the bear market turned everything on its head. That’s right, the trading volume of non-fungible tokens has plummeted by 95% from 17 billion in January 2022.
At the same time, royalties to creators fell from $269 million to just $4.3 million in July 2022, a drop of 98%.. The reduction in payments was well-intentioned, but it could have the opposite effect. If the NFT market has become so well known, it is undoubtedly thanks to the creativity and originality of the works produced.
The drop in payments could slow down the creation of new works, and at the same time slow down an already struggling market.
According to Philipp Kassab, blockchain specialist and in charge of the growth of NFT and games at Sei Labs, this decision is not well-thought-out enough. It’s a short-term strategy because it doesn’t consider the delicate balance between the well-being of consumers and that of creators.
A decision that does not meet with unanimous approval
As the NFT market plummets, friction between merchants and designers reaches a fever pitch. This is the result of a decision taken by the marketplaces Opensea and Blur to reduce royalties to artists. From August 2021 to May 2022, cumulative monthly royalties totaled $1.5 billion, according to data from Nansen.
The popularity of Bored Ape Yacht Club gave visibility to the sector until the re-launch of the pandemic era. Since then, several events have changed the sector, including the launch of Blur. The creation of the new platform in October had the effect of encouraging trade, by reducing royalty rates.
According to Dune Analytics, Blur controls 70% of the daily volume (NFT) on the Ethereum blockchain.
The marketplace then reportedly put pressure on the former number one, Opensea to follow in her footsteps. Shiva Rajamaranthe sales manager of Opensea said it was time to explore new opportunities for creators, linking NFTs to merchandise so that sales could fund their revenues.
Even if the main NFT exchanges are convinced of the merits of their initiative, anger is not subsiding on the creators’ side. For artist Matt Kane, Opensea and Blur are changing the face of non-fungible tokens. In this technology, the victory of one should be the victory of many. But now, one man’s victory is another man’s loss...
Passionate about stock market trading and cryptocurrencies, I write articles on the subject to share my experience and keep you up to date. I’m convinced that cryptocurrencies open up new perspectives and that everyone should experiment with them.
