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Magic Eden, an NFT (nonfungible token) marketplace in Solana, has had to deal with some pushback from the community since the launch of MetaShield, a new enforcement tool meant to stop NFT buyers from skipping creator royalties.
MetaShield was reportedly launched in partnership with an NFT marketplace and aggregator called Coral Cube. When it came out on September 12, the NFT community had different opinions on whether NFT marketplaces should protect the rights of creators or cut royalty fees to make NFTs cheaper for collectors.
The NFT royalty enforcement tool is meant to let NFT creators mark and blur NFTs that were sold without paying creator royalties.
In an eight-part Twitter post on Wednesday, Magic Eden defended its new tool by saying that "custom" royalty marketplaces are "punishing" some of the "hardest working creators of today."
A few weeks before the new tool came out, the NFT marketplace X2Y2 added a new feature that lets buyers choose whether to pay a royalty fee when buying an NFT and, if so, how much to pay.
In its most recent thread, Magic Eden set the record straight by saying that it created MetaShield to protect creators, not to punish buyers.
"Most people agree that markets with no royalties for all creators shouldn't become the norm in an ecosystem," argued Magic Eden:
"What we do is test things, work together, and ship. MetaShield isn't perfect, but it gives creators a choice in this debate.
The NFT marketplace also said that they will not take control of NFTs and that the royalty enforcement tool will not be used to punish buyers.
5/ Finally, clearing up misconceptions:— Merge-ic Eden 🪄 (@MagicEden) September 13, 2022
Is Magic Eden taking control of my NFTs? No.
ME isn’t changing anyone’s NFT. MetaShield is a tool for creators. Creators have choices on how to use it. Most NFTs are mutable. Creators have always had the ability to change their NFTs.
According to Magic Eden, MetaShield was built to allow creators “to track Solana NFTs listed with custom royalties” and “take action where they see fit” to protect their brand.
According to the Magic Eden website, NFT creators are afforded “Editor” rights to shield the NFT, which allows them to modify the royalty, add a watermark or blur the image. Once the debt has been paid, the Editor can revert the NFT back to its original state.
When Magic Eden's MetaShield first came out, people had different feelings about it.
One Twitter user said that adding MetaShield made the Magic Eden NFT market even more centralized, while another said that if the creators use MetaShield, no one will mint NFTs.
There is no way you haven't seen the discussion regarding your own 2% fees on all volume, and then there is the blurring of the jpegs...— Grug (@WiseGrug) September 14, 2022
You're the problem not the royalties, bunch of centralised cucks. https://t.co/PyTNrN309v
Another Twitter user said they were worried that innocent buyers would be punished because they won't be able to use their new NFT. They said:
"My biggest worry is that this will punish the buyer, who might not even know they bought the wrong thing. The NFT will all of a sudden be "shielded" after a certain amount of time. This will cause them to have to pay a lot more in the end.
But a lot of people have also said that Magic Eden "protects" NFT creators.
Honestly its heart warming to see a marketplace leading charge on protecting creators thx @MagicEden ❤️ Refer to @Zeneca_33 Letter 30 👇🏻 to understand current creator royalty payout practices and the challenges on enforcing them https://t.co/LU6UcHPfsb— cathleen.eth (@spicyccnyc) September 14, 2022
Not every NFT market has taken Magic Eden's side. Sudoswap decided not to use the royalty fee model so that its NFT platform would be easier for buyers to use. Instead, buyers will only have to pay the standard platform fees.
Also, Langston Thomas from "nft now" said that even when smart contracts are set up to pay royalties to creators, it's up to the NFT marketplace to honor the royalty agreement.
This is because the NFT marketplace gets the royalty first through the transaction and is not required to give it to the other party.