OpenSea CEO claims Operator Filter will be closed as it wasn't as effective as anticipated.
The notable non-fungible token (NFT) marketplace, OpenSea, decided to retire its on-chain royalty enforcement tool, Operator Filter.
Introduced to help creators exclude NFT marketplaces that don't uphold royalties, this tool will officially be deactivated at the end of the month, on August 31st.
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This significant shift was brought to light in a recent statement from Devin Finzer, the CEO and founder of OpenSea. He introduced the Operator Filter in November 2022 as a "simple code snippet," ensuring that NFTs were only sold on platforms that recognized creator royalties. Unfortunately, the tool's effectiveness hasn't been as anticipated.
In his statement, Finzer highlighted that several NFT platforms, including Blur, have found ways to sidestep the Operator Filter. According to Finzer, they leveraged the Seaport Protocol to dodge OpenSea's blacklist, allowing them to bypass royalty fees.
Moreover, feedback from creators has been mixed. Many have raised concerns over the restrictions placed on their autonomy regarding sales. Finzer stated:
We have heard from some creators that the Operator Filter limits their sense of control over where their collections are sold, and at the same time may collide with a collector’s expectation of full ownership.
Explaining further, Finzer stressed the myriad ways creators can monetize, stating that creator fees, though beneficial for some models, represent just one revenue source in a wide array.
We’ve dedicated a large part of our roadmap to power new use cases — starting with digital and physical redeemables — and to merchandise those use cases more effectively across primary and secondary experiences.
As the Operator Filter is set to close on August 31st, existing collections will see the tool's effects phased out over time. For those on non-Ethereum blockchains, creators' fees will remain in place until February 29th, 2024. Finzer clarified:
To be clear, creator fees aren’t going away — simply the ineffective, unilateral enforcement of them.
This move by OpenSea has sent ripples through the NFT community. While many see this as a setback for NFT artists seeking passive income, others argue it might be a balanced decision.
OpenSea's choice to sunset the Operator Filter tool might reshape the dynamics of NFT royalties. As the community grapples with this change, the broader implications on creators' revenue streams will be closely watched.
