Magic Eden announces transition to Optional Royalty Model

The news that the Solana-based non-fungible token (NFT) stalwart Magic Eden will be transitioning to an optional royalty model was disclosed in a Twitter thread by the marketplace late on Friday night.

The company has announced that starting later on Friday, it will also waive its standard 2% platform fee.

🧵After some difficult reflection and discussions with many creators, we’ve decided to move to optional royalties on @MagicEden.

Effective later today, we will also begin running a promotion to waive our platform fees.

— Magic Eden 🪄 (@MagicEden) October 15, 2022

The move is in line with a controversial trend that has been set by other popular NFT marketplaces like X2Y2, which have decided to make royalty payments optional in an effort to attract more users, to the dissatisfaction of the majority of creators. 

Magic Eden hopes the decision to be temporary

“We hope that this decision is not permanent,” Magic Eden said in the announcement.

Magic Eden’s decision, which came “after difficult reflection and discussions with creators,” provoked instant outrage among NFT Twitter fans. Soon after the announcement, the company organized a Twitter Spaces to take questions from its users which went on for 30 minutes. A Magic Eden representative stated:

“It’s also very sad, it’s also very tragic. We did not want to be in this position, but the market has already spoken in regard to optional market royalties. It was effectively a race to the bottom.”

In addition, the company announced that it will contribute one million dollars to a fund that will be used to develop improved royalty enforcement tools and that it intends to conduct studies on “new models outside of royalties” in the future. Moreover, it is planning to launch a Creator Monetization Hackathon to develop pro-royalty & alternative creator monetization tools. 

According to a representative from Magic Eden, the company’s hands were tied due to the fact that 60% of NFT traders are currently using royalty-optional platforms.

In June, the Solana-based NFT platform secured $130 million in a Series B funding round, as TheCoinRise reported. In the subsequent month, Magic Eden launched Magic Ventures to expand its services to the Web3 sector.