Yuga Labs, the mastermind behind the immensely popular Bored Ape Yacht Club (BAYC) non-fungible token (NFT) collection, in collaboration with LSLTTT Holdings, the creator of Pudgy Penguins, have set restrictions on the trading of some of their NFTs. These restrictions have led to the exclusion of top marketplaces like OpenSea and Blur from hosting these coveted digital assets.

According to reports, Yuga Labs, known for their meticulous approach, has chosen to exclusively trade certain collections, such as Mara, on royalty-enforced marketplaces. An esteemed developer, 0xCygaar on X, confirmed that Yuga Labs meant business, and the collection will solely be accessible on decentralized marketplaces like SudoSwap V2 and X2Y2. These carefully curated venues ensure that royalty payments are properly enforced, protecting the interests of the creators.

The Mara collection showcases 10,000 NFTs featuring the fascinating Maras, magical creatures that inhabit the captivating Otherside metaverse — another brilliant creation by Yuga Labs. These Maras possess the unique ability to breed and evolve, but they primarily serve as loyal companions to the mighty “Kodas,” who guard the Otherside.

In the domain of NFT trading, artists and creators receive royalties as a percentage of the resale price. Both Yuga Labs and LSLTTT Holdings stand to benefit financially each time their artwork is resold, thanks to these royalties.

During the minting process, creators have the liberty to determine the royalty percentage, which can either be a fixed amount or a percentage of the resale price. Although the current royalty rate is less than 5%, it is flexible and can be adjusted to any suitable percentage. These royalties are automatically paid to the creators through the NFT marketplace where the transaction takes place.

Royalties have emerged as an effective means for artists to generate passive income from their NFTs. In fact, purchasing an NFT with royalties directly supports the creators, further motivating them to continue their creative pursuits.

Unfortunately, declining activity in the NFT marketplace has prompted OpenSea and Blur to reduce royalty payments in recent months. The trading volume for NFTs has been steadily dwindling throughout 2022 and continues to maintain a relatively low momentum in 2023. OpenSea and Blur attempted to stimulate activity by implementing changes that facilitated more trading opportunities.

The analytic platform Nansen reported that the average royalty payment as of July 2023 had decreased to a mere 0.6% from the previous year’s average of 2.5%. This decline was largely attributed to Blur, which lowered creator fees to a minimal rate of 0.5%. In response, OpenSea made adjustments to their creator policy, mandating the inclusion of an on-chain enforcement method to receive royalties.

Notably, OpenSea recently retired their OpenSea Operator Filter tool on August 31. This tool enabled creators to block marketplaces that failed to enforce creator royalties. OpenSea has now transitioned to a preferred fees model, as the marketplace attested to a lack of “community support” for the aforementioned tool.

Yuga Labs and LSLTTT Holdings have taken a firm stance by limiting the trading options for their NFTs to royalty-enforced marketplaces only. Their decision prioritizes the protection and sustainability of creators, instilling confidence within the NFT community. By embracing these exclusivities, creators can continue to thrive and innovate, knowing that their valuable contributions are duly compensated.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.