SuperRare Co-Founder: We Remain Committed to NFT Artist Royalties
SuperRare co-founder Jon Perkins sat down with Decrypt's Dan Roberts at NFT Paris to talk about the debate over artist royalties, SuperRare's roots in catering to artists, and building through a bear market.
Creator royalties, or a lack thereof, on NFT marketplaces have been the niche's biggest talking point of late.
For SuperRare though, the decision to pay creators was already made five years ago.
According to the project's co-founder and CTO Jonathan Perkins, when SuperRare launched in 2018, the royalty aspect was going to be a "standard."
“We took a fairly controversial move at the time to include artist royalties. What we said is that if we can help artists make any money through royalties, why not try at least? So we played some part in establishing some kind of a standard, at least for the art side,” told Decrypt during the NFT Paris conference. "Royalties are not going away on SuperRare.”
Creator royalties are fees ranging up to 10% of an NFT sale that's paid to creators. For projects that generate significant trading volume, these fees can be a substantial source of revenue.
OpenSea’s controversial move to change its creator royalty and fee structure earlier this month has raised serious questions about what the value proposition of NFT marketplaces will be if artists and the original creators are cut off revenue streams. Now, buyers on the marketplace are free to decide whether or not they want to honor creators’ royalty preferences on the world’s leading NFT marketplace.
OpenSea Drops Fees, Cuts Creator Royalty Protections as Rival Blur Rises
In the face of rising competition from upstart rival Blur, leading NFT marketplace OpenSea announced today that it will temporarily eliminate its 2.5% fee on sales, as well as cut down creator royalty protections as it attempts to weather a rapidly changing market. Along with axing its own marketplace fee on trades for a “limited time,” effectively cutting off its primary source of revenue, OpenSea tweeted that it will only enforce a 0.5% mandatory creator royalty fee on NFT trades for projects...
The decision followed the news that rival marketplace Blur, which previously offered a 0.5% minimum creator royalty, is enforcing full creator royalties for any collection that blocks trading on OpenSea, marking a fresh round of standoff between the two companies.
“What I think we're seeing pan out now is just the kind of chaos of a new market taking shape,” Perkins, adding that the wider NFT market isn't just about pictures of monkeys and penguins.
“If you think of it in terms of Blur versus OpenSea, at OpenSea there’s surely an art, but there are also domain names, insurance contracts, collectibles, and many other things that are not art,” he said.
More than a quick buck
He also believes that challenges facing more generalized marketplaces are much different than for SuperRare—a social network for art creators and collectors of NFTs—as “collectors on SuperRare are generally not doing high-frequency trading or trying to make a quick buck.”
“We've spent five years building a community where collectors are really building connections with the artists, and there's more goodwill and long-term view and that tends to make it much easier to have consensus around preserving royalties," said Perkins.
Maximizing Profits Will ‘Kill’ Web3: Animoca Brands Chairman
Creator royalties have taken a back seat in the NFT space as marketplace OpenSea recently slashed fees in response to its new rival Blur, which has surged ahead in terms of trading volume on NFTs in part by charging zero trading fees and not enforcing creator royalties. Creator royalties, however, provide an ongoing revenue stream to NFT projects beyond their initial sales—typically a 5% to 10% cut when a token is resold—and many companies are now being led astray, Animoca Brands Chairman Yat S...
As for the recent trend of big companies and brands rushing into the NFT space, Perkins said this is quite natural as there’s “so much surface area,” and big brands are certainly aware of a new customer base and a new creator economy emerging.
“I think it's actually a good thing for Web3 that these brands are coming in and experimenting,” said Perkins. “If I were to give any advice to any companies like this I would say ‘show up without an agenda and try to learn, try to talk to people, learn from the artist.’ I think it's possible to do things in a very authentic way.”
The wrong approach, he said, would be to try to kind of rubber stamp your former approach and try to come in and do something “that's more of gimmicky or low effort.”
“I think the community has a good bullshit detector overall,” said Perkins, adding that for the really savvy collectors with big money, it becomes apparent over time.
