The debate over creator fees or royalties on NFTs has been going on for a while now. Both sides, the creators and collectors, have made their case as to why or why not there should be royalty on top of the sale price of an NFT.
NFT marketplaces have become proxies in this debate, by rolling out policies that favor either side.
The current standards in the NFT industry make it difficult to enforce creator royalties on-chain. Although artists have the option to be coded into the smart contracts that settle NFT transactions, there are marketplaces that don’t honor them or collectors who have found a way to circumvent it altogether.
While creators enjoy payouts in perpetuity, it is the collectors/traders who feel the heat when they have to shell out a royalty on top of the selling price, and given that NFTs have been fetching a decent amount lately, that royalty can add up to an uncomfortable amount for some.
NFT artists believe that they should be rewarded for their creations, not only upon the initial sale but for transactions that take place in the secondary market as well.
Marketplaces batting for collectors
The launch of Sudoswap’s SudoAMM breathed new life into the debate. Sudoswap is an Ethereum NFT marketplace that is known for not honoring artist royalties on NFT sales. Buyers and sellers are usually exempt from paying the 5% or 10% creator royalty that comes with NFTs.
Data from blockchain analytics firm Dune Analytics paints a clearer picture of what the NFT community thinks of royalty-free marketplaces like Sudoswap.
While daily volume peaked in August with a consistent weekly average, the month of September has seen the weekly volume decrease by almost 35%. The total volume, however, has been steadily rising with a current total of 26,329 ETH.
The most recent NFT marketplace that came out against royalty payments is X2Y2. The platform announced on 26 August that buyers will be able to “choose the number of royalties they would like to contribute to projects.”
Marketplaces batting for creators
In contrast to X2Y2’s decision, Solana-based NFT marketplace Magic Eden released a royalty enforcement tool earlier this week. MetaShield gave creators the option to flag NFTs that bypass creator royalties.
Within days of its launch, the tool has had mixed reviews on Twitter, with collectors voicing their disappointment while creators lauded the platform’s efforts to secure their interest.
Magic Eden has defended MetaShield, reiterating the general sentiment that “hardworking creators deserve to be rewarded and paid”. Magic Eden expressed that creators were getting punished by having collections traded on zero royalty marketplaces
NFT giants like OpenSea do honor the royalty amount set by artists, while also providing the option to turn it off. The settlement, however, is not immediate. OpenSea acts as an intermediary and only sends royalties after the platform receives them.
Solana: Assessing the odds of SOL surviving the latest crypto bloodbath
Solana [SOL] has emerged as one of the biggest losers from the 19 August bloodbath in the crypto market. The famed Ethereum [ETH] killer has now lost the highest value among top 10 cryptocurrencies per Coin Market Cap. The SOL token is currently down 21.6% over the past week as the market showed a sharp reverse. However, Solana is beginning to see a mild recovery as the token price rushed to a near 1.75% price hike on the daily chart. Will this be crucial as Solana attempts to climb on the crypto market capitalization charts?
The progress carries on
Amid a recent sell-off, LunarCrush compiled data on Solana’s social engagements in the past week. The social engagements showed a mixed response from the crowd over the past week. The highest engagements were seen on 12 August as they reached over 190 million. But the number fell down massively to 14 August to 115 million. However, there has been a resurgence as of 19 August and engagements ticked at 160 million on the chart.
Solana News further posted an update on the top performing dApps on the network recently. As per this update, Solana-based GameFi application Gameta has led the charge with over 54.4K users. It is followed by Magic Eden and OpenSea NFT marketplaces on Solana as they recorded 27.8K and 4.5K users respectively.
This week saw Phantom, one of Solana’s most popular wallet providers, launch a NFT burning mechanism. This feature allows users to “safely remove spam and clean up (your) Collectibles tab” from inside the wallet. Moreover, users will be able to gain SOL rewards from the process. Phantom is also working on a phishing alert system to draw users’ attention to potentially malicious transactions. These attempts are the latest in line to protect the user base on the Solana network.
Jump Crypto, the crypto arm of TradFi giant, has announced that it build Solana’s open-source core infrastructure. As per the announcement, “Firedancer represents an important step in scaling the Solana network to billions worldwide”. Jump Crypto wrote in its announcement that it will “propose significant upgrades to Solana’s open-source core software.” It says this is an important step in the continued decentralization of Solana’s network.
SOL with some soul
Despite the latest nosedive of the SOL token, Solana has managed to conclude the week on a high. The partnership with Jump Crypto represents a major coup as it strives to hold out its network outages.
APE factor in Magic Eden’s plan to develop an exclusive for BAYC
Imagine a Solana [SOL]-based NFT marketplace planning to build one for an Ethereum [ETH]-based collection. Would it ever be possible to achieve?
Well, the leading Solana NFT marketplace, Magic Eden, seems not to think of impossible things. This is because the platform recently made an announcement that proposed to build a marketplace just for YugaLabs-owned collection, Bored Ape Yacht Club (BAYC)
🧵/ gm apes.
Heard you’re looking for a marketplace.
We think we can help 🪄
Here’s our vision for the best marketplace for apes by apes, powered by $APE on the @apecoin domain, with rewards back to the community 👇🏼 pic.twitter.com/NBGXqn3GSm
— Magic Eden 🪄 (@MagicEden) August 9, 2022
Still on Ethereum?
Interestingly, there is a twist to the proposal. According to the proposal, Magic Eden does not plan to leave the marketplace as an ETH-backed one. In fact, it termed the proposal “A Marketplace for Apes, by Apes, built by Magic Eden.”
This meant that the native cryptocurrency of the BAYC, ApeCoin [APE], would be used for transactions. So are there any reasons BAYC would consider or accept this proposal?
Well, Magic Eden addressed it. Besides its plan to develop it on the ApeCoin.com domain, the marketplace also made a few other points that may drive the ApeCoin DAO to consider.
The platform noted that it would be rewarding for the BAYC community to be in a marketplace where transaction fees are cheaper. It also added that it plans to build the marketplace at no extra cost to the collection community.
Magic Eden also stated that it plans to make the marketplace live in September 2022 with the approval of Yuga Labs and the BAYC community.
The platform included a few costs that users may incur. It had proposed a 1.5% base transaction fee with a 0.25% discount for trades made by BAYC holders, and other related Yuga Labs collections.
Interestingly, BAYC traders may have responded to the update positively. In the last 24 hours, there has been a 109.98% uptick in volume as it rose to $1.23 million based on NFTGo data.
However, its market cap and floor price had slightly declined—at 3.62% and 1.78%, respectively.
What’s in it for APE?
According to the proposal, APE users would also be an exception to paying the complete transaction fees. Magic Eden mentioned that there would be a 0.5% discount on the transaction fees for trades made with APE.
Additionally, if accepted, the marketplace launch could increase APE’s active addresses and improve its price, which has seen an 8.41% decline over the last 24 hours as per CoinMarketCap.
According to the analytic firm Santiment, there has been a sharp decrease in the APE volume. Similarly, its 24-hour active addresses have also plunged.
However, investors may want to watch where the proposal ends as Magic Eden slated three to four weeks for Yuga Labs to respond. If the marketplace sees the light of day, APE investors would likely expect it to take a positive toll on the cryptocurrency.
Solana suffers >8% as ongoing attack drains over 8k+ wallets
Imagine experiencing a robbery without knowing the culprit. Yes, quite an unfortunate scenario. Now, multiply this robbery by a multi-million dollar, think about the situation then. No wonder, you will be petrified. Well, this is the emerging case coming from the crypto world.
Knock knock, who’s there?
On 3 August, the Solana network encountered a multi-million dollar hack, the culprits of which remained unknown as of this writing.
Consequently, SOL, the native token of the Solana network, dropped by 3.76% over the last 24 hours as it slid down to $38. The incident saw more than 8000 wallets face the repercussions.
The affected users shared their distress on social media platforms. So far more than 8000 wallets have been affected. And, the hackers have managed to steal $580 million. This was reportedly done by the four addresses mentioned below in the tweet.
MisTrack, a security analyst shared this development.
So far more than 8000 wallets and ~$580M were stolen by the following 4 addresses.
— MistTrack🕵️ (@MistTrack_io) August 3, 2022
Blockchain investigator PeckShield reiterated the said illicit activity. He further added that the widespread hack was likely caused due to a “supply chain issue” which was exploited to steal users’ private keys.
#PeckShieldAlert The widespread hack on Solana wallets is likely due to the supply chain issue exploited to steal/uncover user private keys behind affects wallets. So far, the loss is estimated to be $8M, excluding one illiquid shitcoin (only has 30 holds & maybe misvalued $570M) pic.twitter.com/aTGNsTc6d8
— PeckShieldAlert (@PeckShieldAlert) August 3, 2022
Related wallet providers Phantom, and non-fungible token (NFT) marketplace Magic Eden alerted users on the same issue. Phantom, a Solana wallet built for DeFi and NFTs tweeted,
We are working closely with other teams to get to the bottom of a reported vulnerability in the Solana ecosystem. At this time, the team does not believe this is a Phantom-specific issue.
As soon as we gather more information, we will issue an update.
— Phantom (@phantom) August 3, 2022
Magic Eden confirmed the reports earlier in the day on 3 August by stating,
“There seems to be a widespread SOL exploit that’s draining wallets, people should revoke permissions for any suspicious links.”
As per Solana Status‘ investigation, engineers from multiple ecosystems, with the help of several security firms, investigated drained wallets on Solana. “There is no evidence hardware wallets are impacted,” the team revealed in a tweet.
Meanwhile, Ava Labs CEO and founder Emin Gun Sirer stated that the number was 7,000 plus wallets. Well, ‘a number which is rising at around 20 per minute.’ As the transactions appear to be signed properly, the attacker likely acquired access to private keys.
One possible route is a “supply chain attack” where a JS library is hacked, and it exfiltrates (steals) users’ private keys. Affected wallets seem to have been created in the last ~9 months, but there are reports of freshly created wallets also being affected.
— Emin Gün Sirer🔺 (@el33th4xor) August 3, 2022
Binance’s chief, Changpeng Zhao (CZ), too commented on this delicate matter to shed light on this situation.
Shades of certainty
Unfortunately, this isn’t the first time, a Solana-related hack was discovered.
This doesn’t mean that SOL didn’t see the light at the end of the tunnel.
Despite market conditions, network usage measured by unique fee payers continued an upward trend.
On the Solana network, unique fee payers reached an all-time high of 450,000 in May. This was almost double the previous all-time high of 280,000 in January 2022.
Notably, the network averaged around 205,000 unique fee payers during Q1. And, stabilized at about 320,000 during Q2.
The growth in unique fee payers is consistent with the growth in newly minted NFTs, NFT sales, and unique NFT buyers.
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