OpenSea, the largest NFT marketplace, announced its decision to end the mandatory collection of artist resale fees, marking a significant change in its policy.

Beginning in March 2024, the company is moving away from its earlier fixed resale model and will introduce a voluntary tipping system. Sellers will then have the choice to allocate a percentage of the initial sale price to artists. The OpenSea Operator Filter, which permits users to specify their desired royalty payment percentage, will be phased out on August 31.

OpenSea's discontinuation of the Operator Filter is in line with the industry's move toward zero creator fees, mirroring the evolving Web3 landscape. This change is focused on providing collectors and creators with increased options and adaptability concerning creator fees. Additionally, OpenSea aims to shift its focus toward new use cases, such as digital and physical redeemables, to encourage innovation beyond a singular revenue model.

The decision to discontinue the royalty tool has sparked backlash, with Yuga Labs, known for NFT collections like Bored Ape Yacht Club, announcing its plans to phase out NFT projects on OpenSea, starting in February 2024, as a measure to safeguard creator royalties. This move could pose a financial challenge for OpenSea, as Yuga Lab's trading volume accounts for ~80% of OpenSea's activity. 

Analyst QuickTake: OpenSea's decision to end its Resale Royalty Policy, coupled with the discontinuation of support for BSC NFTs, appears to be primarily driven by financial considerations and aligns with industry-wide cost-cutting trends amidst a declining NFT market since its 2021 peak. The company is likely responding to the evolving landscape of the NFT market, which has seen declining artist royalties and increased competition from platforms like Blur. The departure of key projects like Yuga Labs reacting to the royalty policy change poses a challenge, as it contributes significantly to OpenSea's trading volume.