OpenSea Enforcing On-Chain Royalties??

Estimated Read Time: 6 min

Hey friends,

Wonderful to have you back on today's edition of Morning NFTea. Today we'll be covering OpenSea's latest debacle, Asics NFT shoes, and some fun news from Rolex and GameStop. On that note, let's jump into it!

OpenSea To Offer Optional Royalties

Only a few editions ago we covered the stir in the NFT world when Solana's largest NFT marketplace Magic Eden made creator royalties optional, well now the largest Ethereum NFT marketplace OpenSea is about to follow a similar route. Taking a step back, one of the main factors for initial NFT popularity was the ability for creators/artists to receive royalties on secondary sales of their NFT. This seemingly mandatory service has recently been undercut by competing marketplaces fighting for buyers. As a result, OpenSea’s market share dropped from 90% in March to just 60% last month. In a blog post, OpenSea CEO Devin Finzer stated in markets where payments are optional, they’ve “seen the voluntary creator fee payment percentage dwindle to less than 20%,” while in others, creator fees are “just not paid at all”. 

To address this, OpenSea has created a new tool that can be added to future and existing upgradable NFT smart contracts which will allow creators to provide “on-chain enforcement” of their royalties by restricting sales to certain marketplaces. More specifically, Devin said “We provide a template GitHub repo that helps you use a solution that basically blocks lists marketplace that doesn’t support creator fees, you don't have to use that solution; the requirement is that if you want creator fees, you have to enforce them on chain… It’s clear that many creators want the ability to enforce fees on-chain; and fundamentally, we believe that the choice should be theirs to make — it shouldn’t be a decision made for them by marketplaces”. 

Starting December 8th, OpenSea will only enforce royalties for collections using this new enforcement tool, otherwise, royalties will be optional. It’s no doubt OpenSea has been backed into a corner by these cheaper marketplaces that continue to rise in volume. But, it's good to see that OpenSea is proactively attempting to address this problem through their new tool. In the end, although this may work out cheaper for everyday people by avoiding creator royalties, we will likely see drastic impacts on the creator economy as projects lose a once-important income source.

ASICS New Web3 Shoes

When it comes to shoe companies, few hold a candle to Nike which has 51% of the running shoe market, but right behind is ASICS with almost triple the market share of third-place Adidas. The Japanese sportswear company has just announced the upcoming ASICS X SOLANA UI Collection of GT-2000 11 running shoes, made specifically for the Web3 community through a Solana-inspired design that “represents the balance between using computers and phones and being active”. These limited-edition shoes are in partnership with Solana Pay which can be used to purchase the shoes, but also with NFT collection STEPN where you have the chance to be airdropped an ASICS x STEPN NFT sneaker. Buyers will also be airdropped an ASICS Badge NFT that gives you future rewards and experiences from the ASICs brand as they continue to transition into Web3. ASICs Director of Digital Goods Joe Pace, said “We see a place for us to help in Web3 and bring products that inspire people to be physically active… For us, it’s just a different way of telling stories about our products and getting specific communities excited about them”. Another newsletter and another legacy brand furthering their commitment to Web3. We may be in a bear market, but this is evidence that the NFT momentum from existing brands only continues to grow.

Rolex Reveals Future NFT Plans

Luxury brands and businesses have been some of the first to embrace NFTs, such as Prada using NFTs for ownership authentication, or Gucci investing in digital stores, but soon to join the list is the largest luxury watchmaker, Rolex. A trademark application has been submitted by Rolex claiming plans for NFTs, NFT-backed media, an NFT marketplace, crypto keys, and crypto transactions. Our old friend Mike Kondoudis who gave us VISA, Formula 1, and PayPal's NFT applications also found the recent Rolex trademarks. These trademarks even mention online auctions for virtual goods such as watches, art objects, and digital collectibles. Are these the first signs of luxury digital watches that may soon be flexed in the Metaverse? The trademark also talks about digital marketing “through product placements in online games or virtual environments”. This scope of plans from Rolex makes it pretty clear they want to get involved with Web3 and experiment with the prospect of NFT digital collectibles, marking yet another household name brand feeling the pressure of our eventual Web3 future.

GameStop Doubling Down On NFT Marketplace

GameStop hasn't had it easy with its brick-and-mortar business model for video games heading in the same direction as now abandoned video stores, but we may see the comeback of a century with GameStop heavily investing in its own gaming NFT marketplace. Four months ago, we covered GameStop's plans for a digital asset marketplace and a $100 million incentive fund for Web3 game developers, now a recent announcement has them in full partnership with leading Web3 game developer Immutable-X. Immutable-X is most notable for recently raising $500 million in investments to be the future of Web3 gaming, achieving this through its Ethereum layer-2 solution making faster, cheaper, and more energy-efficient transactions for in-game mechanics. As of this week, the GameStop NFT marketplace is open to Immutable-X games like Illuvium, Gods Unchained, and Guild of Guardians where you can buy, sell, and trade digital inventory with a low 0.2% market fee. Prior to the debut of Immutable-X, GameStop had a total trading volume of over $29 million from 24,000 traders, so the demand definitely speaks for itself, and this new partnership should only add more fuel to the fire. As GameStop rebrands itself as a Web3 gaming platform, it's a wholesome story of redemption while foreshadowing the future of gaming with true ownership over your digital inventory.

Huge thanks for checking in on this edition of Morning NFTea. We hope you have a great couple of days and we will be back soon - take care!

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DISCLAIMER: 

None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.