Animoca Brands accuses NFT platforms of maximizing profits at the expense of creators

The battle for dominance in the NFT industry has heated up, with upstart NFT marketplace Blur dethroning OpenSea by trading volumes. Blur has reported trading volumes of more than $622 million in the past seven days, according to DappRadar. The popularity could be attributed to not charging trading fees or imposing creator royalties.

Animoca Brands chairman supports NFT royalties

Creator royalties provide a steady source of revenue for NFT projects. However, there has been much controversy over these payments, which usually range between a 5% and 10% deduction when an NFT is resold. Some have called these royalties exploitative, with Blue even engaging in an online confrontation with OpenSea.

The Chairman of Animoca Brands, Yat Siu, now believes that companies are being led astray because of these creator royalties. According to Siu, the ongoing conflict around royalty fees was about platforms scooping the largest market share at the expense of the creators.

While speaking to crypto publication Decrypt, Siu said that failing to enforce creator royalties was “wrong for many, many reasons.” The Animoca Brands Chairman further said that royalties were the creator economy’s main backbone, compared to the gas fees needed to process transactions on blockchains such as Ethereum.

Animoca Brands is one of the largest players in the web3 gaming industry. The company is behind popular projects like The Sandbox metaverse game on Ethereum. Siu noted that culture was the backbone of modern society, whether in the Web3 industry or beyond, and it could not be taken for granted.

Siu noted that culture was behind the success of the world’s richest man, Bernard Arnault, who is the CEO and co-founder of LVMH. LVMH is behind luxury brands such as Gucci, Tiffany & Co., and Hennessy.

Siu further said that culture also drove the growth of streaming platforms like Netflix and HBO. It also supported the gaming consoles boom, enabling people to engage with these new technologies through television shows, video games, and movies.

The Animoca Brands chairman argued that removing royalties from the creator economy in the NFT industry would erode the culture existing in the sector and cause more harm than good. “If you kill the royalties, you kill the very industry that fed you, so it has to be protected,” Siu said.

Industry is focused on maximizing profits

According to Siu, NFT platforms were operating in the same manner as traditional finance. He noted that prioritizing profits over the fair share of the creators was part of the mentality in the traditional finance sector. Siu noted that this mentality was not becoming prevalent in the Web3 industry, as seen in the debate around creator royalties.

He said that in the crypto industry, a small section of people had the same mentality as Wall Street, and they were focused on profit maximization. However, he argued that such a mentality could kill the NFT sector as creators were not rewarded for their efforts.