The Ethereum-based NFT marketplace has made paying creator royalties optional when trading NFTs, making it the latest marketplace to do so.
No More Compulsory Royalties
LooksRare is the latest NFT marketplace to remove compulsory creator royalties on its platform. In a blog post released on its website, the LooksRare team announced that it would not enforce creator royalties for NFT trades. This means that NFT traders will not be required to pay any fees to the creator on their transactions when buying a piece of digital collectible. Traders will, however, be able to choose to pay optional royalties. However, the team also announced that they would be sharing 25% of the LooksRare protocol fee with creators and collection owners.
In the blog post, the team wrote,
“LooksRare will be directing 25% of protocol fees to creators, and removing standard creator royalties. Buyers can opt-in to pay optional royalties at checkout.”
New Pricing Model At LooksRare
The announcement also revealed that the protocol fees would continue to be priced at 2% of the transaction, with 1.5% of each trade amount being sent to LOOKS stakers and the remaining 0.5% being sent to collections. However, the collection amount will only be sent if a receiving address has been set up. The total fees will be limited to 1.5% if there is no receiving address. Finally, the team revealed that 95% of trading rewards would go to the sellers, and the remaining 5% would go to the buyers. Previously the trading rewards distribution was 50:50.
LooksRare has been criticized recently for its million-dollar cashout, which had many community members worrying about a rug pull. However, the platform is the only one that has implemented an optional-royalties model while ensuring that creators receive their rightful share. One of the more noteworthy NFT marketplaces to adopt the optional royalty model recently is the Solana-based platform Magic Eden.
Increasing Royalty-Free Marketplaces
The statement also contained a more in-depth reasoning behind the move. The team acknowledges that the spur of zero-royalty marketplaces has affected the mentality of paying royalties to creators and has removed an important source of passive income for most creators.
The team tweeted,
“It’s not our place to say who deserves royalties or how much, but if you want artists or creators to be able to go all out, do cool .. and give back, they probably need your support.”
Acknowledging the changing mindset, the team has claimed to have put together a competitive solution that would still benefit creators by diverting protocol fees directly to them.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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