Billionaire investor Mark Cuban criticized OpenSeas' decision to make royalties payment on non-fungible tokens NFT optional, calling it a HUGE MISTAKE that would hurt the industry and diminish trust.
On Aug. 17, OpenSea said it would stop enforcing creator royalties on secondary sales by the end of this month.
NFT creators usually receive royalties for every sale of their assets on platforms like OpenSea. The royalties, capped at 10% on OpenSea, can be varied across marketplaces, such as LooksRare and SudoSwap, for example, that allow creators to choose their royalty model.
When the marketplace lost market share to competitors like Blur, the decision to discontinue royalties came after it lost market share to competitors like Blur, which introduced optional royalty payments and other trading incentives to draw more users to its platform.
Dune analytics said OpenSeas' NFT trading volume dropped to less than 25 percent from a peak of more than 90% within a year. The market is trying to regain its dominance by introducing new measures to attract more users.
Cuban criticised OpenSeas decision to remove royalties as a desperate move, arguing that it was misguided.
He sees the problem of enforcing royalties across all NFT marketplaces, which should be fixed. He disagreed, however, that optional royalty was the way forward.
Cuban is an investor in OpenSea.
Some users, however, pointed out that OpenSea had no choice if it wanted to maintain its relevance in the industry.
Sheetfu, the CDO of the dominant NFT market on the Solana SOL network MagicEden, argued that this was a problem with the tech and that the solution should be at the protocol level. He argues that creators should be allowed to use different methods to enforce royalties.