Magic Eden Introduces Royalty Protection Tool After Turning Off Fees
Three days after letting its users bypass royalties on its marketplace, Magic Eden is giving NFT creators a chance to protect their fees.
The marketplace posted the form in a tweet Monday for creators of projects to fill out if they were interested in using the Cardinal Token Manager, an open-source tool that wraps NFTs in a "conditional ownership protocol" that mimics the SPL Token Program on Solana allowing for "selective transferability." Cardinal Labs and Magic Eden are looking for projects launching after Oct. 16.
"If all NFTs in a collection are wrapped in this way, it will be impossible for any marketplace to circumvent royalties," Cardinal Labs said in a tweet.
Cardinal Labs said the tool only works if all the tokens are wrapped from the beginning of the contract or if all the NFT's holders sign a transaction to wrap their token.
"Whilst this tech is very promising, it does create points of centralization and holder friction which creators should be aware of," Magic Eden said in a tweet. "There may be mitigations that we are working to explore right now, and we are happy to explain it more to creators who apply."
Magic Eden added to the royalty debate Oct. 14 when it announced that it would move to "optional royalties."
"We understand this move has serious implications for the ecosystem. We also hope it is not a permanent decision. Today, royalties are not enforceable on chain," Magic Eden tweeted.
The change caused everyone from Beeple to j1mmy.eth to weigh in.
"Hey MagicEden, -we know you had a little too much to drink last night and made some decisions you now regret...not too late to tell everyone you made a mistake and avoid the long-term backlash from creators and communities alike," said j1mmy.eth. "Creator royalties are not optional."
while I am obviously pro-royalties and don’t love what @MagicEden and others are doing, I do think there is one key change that they hit on… switching from a sellers FEE, to a buyer’s PREMIUM. i think this is actually much more sustainable long term… 🧵— beeple (@beeple) October 15, 2022