Magic Eden’s dominance over Solana NFT has faced increased competition from rivals.
Magic Eden, a Solana-based NFT marketplace, revealed it would switch to an optional royalty model and said it would waive the 2% platform fee, effective October 14.
The new optional incentive model allows the buyer to determine the number of royalties they will pay. While all collections will pay full royalties by default, buyers have the option to decide if and how much to pay.
Magic Eden wrote that their “fundamental reason for changing royalty payments to the buyer is to make sure the buyer fully understands if they are going to receive the benefits that creators provide (Discord, participation, etc.).”
On Twitter, @MagicEden posted that, “After some difficult reflection and discussions with many creators, we’ve decided to move to optional royalties on @MagicEden. Effective later today, we will also begin running a promotion to waive our platform fees.”
The NFT marketplace admitted that the decision was not an easy one. Still, the changing dynamics of the marketplace forced his hand. The Web 3.0 company added that it would launch a $1 million creator monetization hackathon. The initiative will focus on developing new ways for creators to monetize their works on the platform.
Magic Eden: Solana NFT Marketplace Optional Royalties
Recently, Solana-based NFT marketplaces like X2Y2, Yawww, and Solanart launched platforms that allow users to trade NFTs without paying royalties. In addition to these marketplaces, other NFT projects, such as DeGods, have also introduced the concept of 0% royalties in the marketplace.
A tweet by @MagicEden on October 9th announced that, “the metadata for the DeGods collection royalties are being updated from 9.99% to 0%.”
The move has divided the community, with some showing support for the new model that Magic Eden, Solana’s NFT marketplace, wants to implement, while others have criticized it for its treatment of creators.
Magic Eden reacted by posting a tweet claiming that, “After some difficult reflection and discussions with many creators, we’ve decided to move to optional royalties on @MagicEden. Effective later today, we will also begin running a promotion to waive our platform fees.”
Magic Eden revealed that NFT marketplaces with this optional royalty model had seen an increase in the number of wallets interacting with their platform.
Two of a series of tweets posted by Magic Eden on October 14th explained the situation further:
“The market has been shifting towards optional creator royalties for a while. These charts show the cumulative wallets that have used optional royalty marketplaces to buy or sell NFTs.”
“We have actively been trying to avoid this outcome and spent the last few weeks exploring different alternatives. Unfortunately, royalties are not enforceable on a protocol level, so we have had to adapt to shifting market dynamics.”
Solana NFT Marketplace Status
Magic Eden’s dominance of the Solana marketplace appears to be waning in light of the latest developments in the space. According to Tiexo data, Magic Eden controlled 89% of Solana NFT market volumes six months ago. But that figure has lately dropped to 69%.
Meanwhile, NFT marketplaces with optional royalty models like Solanart saw their volume increase from 1.66% to 6.62%.
Despite the progress made by these platforms, data from DappRadar shows that the number of unique active wallets interacting with Magic Eden increased by 37.52% in the last 30 days. Solana’s marketplace also processed 22.24 million.
By Audy Castaneda
