OpenSea Disables Creator Royalty Fee Tool Operator Filter

Under increasing competitive pressure from rivals like Blur, the leading NFT marketplace OpenSea has announced a significant adjustment to its creator royalty fee structure.

OpenSea Disables Operator Filter for Creator Royalties

According to the latest update, OpenSea has announced that it will disable the Operator Filter, a tool introduced in November last year that was intended to give creators more control over royalty fees.

Key changes from the NFT marketplace include:

• The Operator Filter tool will be officially removed starting August 31.
• For collections that have used the Operator Filter, the platform will continue to provide royalties to creators until February 29, 2024.
• New collections will adopt an optional royalty fee mechanism.

In summary, while royalties will not be eliminated, their enforcement is deemed ineffective and somewhat one-sided, as stated in the announcement.

OpenSea explained that the Operator Filter was ineffective because it did not receive consensus from both collectors and creators. The filter reportedly limited creators' control over their own collections and created obstacles by blocking the resale of NFTs on marketplaces that did not enforce royalty fees.

This shift has led to both users and trading volume moving to other platforms, such as X2Y2, Magic Eden, and the rising Blur, all of which allow creators to customize royalty fees.

Historically, OpenSea has seen maintaining royalty fees as a way to protect content creators. In 2022, OpenSea proudly distributed over $1 billion in royalties to NFT collections.

However, since facing competitive tensions with Blur earlier this year, the platform has had to adjust its fixed 10% fee to a flexible model allowing creators to set their own rates, with a minimum of 0.5%, and offer zero transaction fees for certain periods.

Given the recent decline in NFT trading volumes and diminished investor interest, OpenSea's move is understandable as part of its effort to attract the gradually dwindling investor base back to the platform.