Popular NFT marketplace OpenSea has announced the implementation of the ERC-721C standard for creator royalties.
This standard, developed by Limit Break, allows for programmable and enforceable creator earnings on-chain, providing creators with more control over their intellectual property.
With the ERC-721C standard, creators will be allowed to set and enforce their earnings on the platform.
Source: OpenSeaWhat is ERC-721C?
ERC-721C, or “Ethereum Request for Comment – 721 Collection,” is a token standard developed by Limit Break to address the issue of creators not receiving proper compensation for their work on secondary markets.
One of the key features of ERC-721C is its ability to enable creators to enforce royalties on their works directly through the blockchain. This means that whenever an NFT is resold on a secondary market, the creator automatically receives a percentage of the sale price as compensation.
This feature aims to tackle the problem of “wash trading,” where individuals evade paying creator royalties through various means such as self-custody wallets or non-compliant trading platforms.
With ERC-721C, creators can ensure they are properly compensated for their work, even across secondary market transactions.
How do creators on OpenSea become eligible?
To be eligible for this feature, NFT smart contracts must adhere to the ERC-721C standard or be upgradeable to one.
Creators can enable ERC-721C compatibility within the OpenSea Creator Studio. Collections crafted via OpenSea Studio can establish creator earnings enforcement within their settings. Similarly, for collections deployed using ERC721-C or ERC1155-C compatible custom smart contracts, creators can manage their earnings through the OpenSea Studio.
The integration of the ERC-721C standard builds upon the Ethereum network upgrade known as Dencun, which occurred on March 13, 2021.
Enforcing creator earnings according to ERC-721C standards will restrict sales exclusively to OpenSea and other marketplaces powered by LimitBreak’s Payment Processor, such as Magic Eden, with royalties potentially aligning with those set by creators with the lowest fee structures on other platforms.
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