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The company has launched a community-managed whitelisting and blacklisting tool to enforce creator royalties on the chain.
NFT royalties are now enforceable thanks to Immutable
While many NFT platforms have struggled to protect creators’ royalties, Immutable has found a way to enforce such fees at the protocol level.
On Thursday, the blockchain technology company announced that it has deployed a whitelisting and blacklisting tool on Ether to enforce creators’ royalties.
Smart contracts that honor royalties are whitelisted, while contracts that bypass royalties are blacklisted. NFT creators can then use these lists to dictate the smart contracts that can transfer or receive NFTs from their collections.
By doing so, creators can rest assured that holders can only trade their creations through contracts that respect royalties. The company also adds that $IMX token holders will manage these lists. Thus, allowing to manage both lists in a decentralized way.
It is worth noting that the tool is already available on ImmutableX, the company’s L2 extension solution on ethereum.
About the creator fees debate
Whenever an NFT is sold on the market, a portion of its sales price will be returned to the original creator in the form of NFT royalties. These payments will allow artists to receive recurring revenue from secondary sales of their Web3 creations.
However, NFT royalties are not enforceable on an agreement level. Creators simply rely on marketplaces like OpenSea to take a portion of the sales revenue before it is sent to them.
For this reason, some emerging marketplaces, like Sudoswap, have gained an advantage by enabling royalty-free deals on their platforms. Needless to say, this has led to a boom in zero-royalty platforms, especially among NFT traders.
Many believe that the race to the bottom only hurts the entire Web3 ecosystem. If creators are not incentivized to build, who will fuel the growth of the space? Knowing this, multiple stakeholders are looking for ways to enforce royalties on the chain.
Immutable X is showing the way
With Immutable now leading the way, many platforms are likely to follow suit.
“Our vision is an ecosystem where creators can choose their royalty model and enforceability level, and users can vote with their feet on the projects they feel strike the best balance,” said Alex Connolly, Immutable co-founder and CTO.
“Softly enforced royalties only punish users who try to support projects and greatly reduce creators’ and game studios’ confidence in their revenue streams. Royalties, properly structured, provide important long-term incentive adjustments.”
Immutable X is home to several blockchain games, such as Illuvium, Gods Unchained, Guild of Guardians, and more.
Immutable is expanding enforceable royalties to ETH to protect $1.8b of creator royalties
This is a major step in establishing industry-wide standards around enforceable royalty payouts. If you are building and creating in web3, you should be rewarded 🧵https://t.co/bFRUh6Pg4p
— Immutable 🅧 – $IMX (@Immutable) November 4, 2022
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