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Home Web 3

Enforcing NFT Royalties: OpenSea’s Integration Of The ERC-721C Standard

April 3, 2024
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Enforcing NFT Royalties: OpenSea’s Integration Of The ERC-721C Standard
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As the NFT industry continues to grow, one major concern has emerged—how can creators be properly compensated for their work? The introduction of the ERC-721C token standard and its integration into the popular NFT marketplace OpenSea have tackled this issue head-on.

What is ERC-721C?

ERC-721C stands for “Ethereum Request for Comment – 721 Collection” and is a token standard developed specifically for non-fungible tokens. Non-fungible tokens, or NFTs, are unique digital assets that cannot be replicated or exchanged for another token of equal value. The ERC-721C standard was first developed by blockchain gaming company Limit Break in May of last year to address the issue of creators not receiving proper compensation for their works in secondary markets.

One of the main features of ERC-721C is the ability for creators to enforce royalties on their works directly through the blockchain. This means that whenever an NFT is resold on a secondary market, the creator will automatically receive a percentage of the sale price as compensation.

This feature addresses the problem of “wash trading” where individuals would evade paying creator royalties by using self-custody wallets or trading on platforms that did not respect set royalties. With ERC-721C, creators can ensure they are properly compensated for their work even in secondary market transactions.

OpenSea Integration

The compatibility for ERC-721C on OpenSea was made possible after the Dencun upgrade on the Ethereum network on March 13. This integration allows creators to enforce earnings via ERC-721C and ensures that sales are only supported on OpenSea and other Limit Break’s Payment Processor-powered marketplaces. This means that creators have more control over the conditions of their NFT sales, further protecting their earnings.

See also  NFT market slump shows it’s maturing toward ‘genuine utility,’ execs argue

In addition to the integration with OpenSea, creators can also utilize Seaport 1.6, OpenSea’s protocol that allows for NFT sales under specific conditions. This further enhances the control creators have over their NFT sales and allows them to set certain parameters, such as enforcing royalties or only allowing sales on specific marketplaces.

The Role of ERC-721C

The integration of ERC-721C into OpenSea and other NFT marketplaces is a major step towards fair compensation for creators in the NFT world. By standardizing conditions for token transfers, including royalties, creators can ensure that their work is not undervalued or underpaid. This also incentivizes fair trading practices and protects the integrity of the NFT industry.

In conclusion, ERC-721C is a game-changing token standard that addresses the issue of creator earnings in the NFT world. Its integration into OpenSea and other marketplaces allows for automatic enforcement of royalties, giving creators more control over their earnings and protecting the industry from wash trading practices. As the NFT industry continues to evolve, ERC-721C will play a crucial role in ensuring fair compensation for creators and further legitimizing this exciting new digital asset class.

Tags: EnforcingERC721CIntegrationNFTOpenSeasRoyaltiesStandard

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