There have been a lot of debates and decisions around NFT royalties in the last few weeks. From NFT creators to traders, and NFT marketplaces, participants in the NFT space have argued for and against the idea.
On November 6, leading NFT marketplace OpenSea, caused an uproar rippling through the NFT community after it announced that it might stop enforcing royalty collection for existing collections. However, the company quickly backtracked on its decision following severe backlash to the proposal from the NFT community.
While OpenSea was on the verge of dropping royalties enforcement, there are others like Rarible that have continued to pledge their support for the creator economy. Following OpenSea’s earlier announcement, Rarible stated that removing royalties was a rat race to the bottom where everyone loses.
Alex Salnikov, Co-founder and Chief Strategy Officer of Rarible, shared his thoughts on the whole royalties saga in an exclusive interview with DAO Times. According to him, his company will continue to remain pro-royalties “now and into the future.” He said:
Rarible doesn’t believe in the removal of royalties and we will do whatever we can to achieve a pro-royalty outcome. Removing royalties hurts creators by denying them one of their main sources of income. We need to collectively come up with a solution to enforce royalties or we face an outcome where the entire market will go against royalties.
Before now, Rarible had proposed “community marketplaces” as one of the solutions to the royalties problem. These marketplaces will be powered by Rarible Protocol and honor royalties on transactions from both native and aggregated listings.
Through native listings, because Rarible enforces royalties, all royalties on these listings are respected via the smart contract by design. Royalties for aggregated listings on community marketplaces depend on which marketplace (OpenSea, X2Y2, sudoswap, LooksRare) the listing is being pulled from.
The platform also offers a “royalties cash back” program that was implemented as part of the Rarible 2 update. The initiative is a part of the company’s “larger strategy to bring to the market new token incentives that solve the problems [it had] seen in the past with other token models.”
Meanwhile, it might not be common knowledge by Rarible has its own decentralized autonomous organization (DAO), which was created in 2022 with the launch of the $RARI token. Since the launch of the Rarible Protocol in August 2021, the platform has been on a gradual path to decentralization, “with the end goal of being fully governed by the $RARI token.” Alex added:
RARI Foundation was established this year and marks the latest step in the development of the DAO, laying the groundwork for the organization to take over full ownership of the Rarible Protocol.