The company says it will also be waiving its 2% platform fee, effective later Friday.
The move follows a controversial trend set by other popular NFT marketplaces like X2Y2, which have opted to make royalty payments optional in a bid to attract more users — to the chagrin of most creators.
“We hope that this decision is not permanent,” Magic Eden said in the announcement.
Magic Eden’s thread sparked immediate outrage on NFT Twitter. The company hosted a Twitter Spaces 30 minutes after the announcement to field questions from its users.
“It’s also very sad, it’s also very tragic. We did not want to be in this position, but the market has already spoken in regards to optional market royalties,” a Magic Eden representative said. “It was effectively a race to the bottom.”
The company also said it’s putting $1 million towards a fund to create better royalty enforcement tools, and hopes to experiment with “new models outside of royalties” in the future. A representative from Magic Eden said its hand was forced by 60% of NFT traders currently trading on royalty-optional platforms.
Magic Eden raised $130 million at a $1.3 billion valuation in June.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.