OpenSea enables support for ERC-721C programmable earnings standard
Nonfungible tokens (NFT) trading platform OpenSea has added support for the ERC-721C token standard that allows creators to set and enforce royalties.
According to the April 2 announcement, creators on OpenSea can now enforce earnings via one click. Invented last May by blockchain gaming company Limit Break, ERC-721C solves the problem of NFT wash trading by standardizing token transfer conditions, such as royalties, across all channels. Before their invention, users could easily bypass creator royalty commissions on secondary markets, such as OpenSea and Blur, by transferring NFTs through self-custody wallets or even other NFT marketplaces that did not honor creators' royalty requirements.
"In the long-run, this allowed for the incentivization of zero-fee, royalty-optional trading with airdrops, effectively turning tokens intended to be non-fungible into proxies for fungible tokens," Limit Break explained in a Medium post, adding that "traders were incentivized to farm tokens by wash-trading NFTs among their own wallets, which is bad for the NFT industry."
As told by OpenSea developers, compatibility for ERC-721C was only enabled by the March 13 Dencun upgrade on the Ethereum network. "If you enforce your creator earnings according to the steps above, sales will only be supported on OpenSea and other marketplaces powered by LimitBreak’s Payment Processor," the platform stated. After ERC-721C contract deployment on OpenSea, creators can still manually list their digital artwork on other marketplaces, but OpenSea will also match the lowest royalties available on other platforms set by the creator.
The feature is also compatible with OpenSea's Seaport 1.6, which programs NFTs to be sold only under certain conditions, such as a changing metadata in reaction to sale volume. Although largely at the discretion of its creator, NFT royalties typically range between 2.5% to 10% per sale. The top 10 NFT collections have earned over $345 million in royalties since their inception.
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