In the world of non-fungible tokens (NFTs), marketplaces are beginning to experiment with new models for paying artists. LooksRare, a marketplace built on the Ethereum blockchain, has announced that it will no longer apply creator royalties by default. Instead, buyers will have the option to pay royalties to the artist if they choose.
This announcement follows a similar move by Magic Eden, another NFT marketplace built on the Solana blockchain. The two marketplaces respond to a growing trend of investors and collectors of NFT (ou Token non fongible) who are reluctant to pay royalties to artists.
Now, buyers will no longer have to pay a 3% fee on their purchases. Instead, the company will collect a 2% commission on each transaction, of which 1.5% will go to LOOKS participants and the remaining 0.5% to collectors.
However, until a receiving address has been established, the amount collected will not be delivered. In case there is no receiving address, the total commission will be limited to 1.5%.
LooksRare recently came under fire for its million dollar cashout which has many in the community fearing a scam.
However, the platform is the only one which, while ensuring that artists receive their fair share, has adopted a development philosophy based on investment. It therefore does not depend on donations or other forms of income.
In addition, its ecosystem offers the opportunity to all creators who wish to sell their products without having to give up their participation.
Also, since its launch, the LooksRare marketplace has accumulated billions of dollars in trading volume. However, it quickly became apparent that users sometimes manipulate sales through a process called wash trading.
Wash trading is an illegal practice in which a trader sells an asset to himself at an artificially inflated price in order to inflate the trading volume of the asset and drive up prices.
LooksRare has since taken steps to crack down on wash trading, but the practice continues to be a problem for the marketplace.
Finally, by giving buyers the choice to opt in to paying royalties, marketplaces like LooksRare hope to strike a balance between supporting artists and attracting more customers.
Time will tell if this strategy will be successful or flop. Either way, it represents a new way of thinking about how NFT marketplaces can best support the creators who use them.