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Magic Eden Opens Up About Its Controversial NFT Tool

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Magic Eden Opens Up About Its Controversial NFT Tool

The debate is heating up surrounding creator royalties in the NFT space. Initially instigated in response to platforms like sudoswap, X2Y2, and Yawww emerging as opponents of cookie-cutter creator royalties, the conversation has continued to expand cross-chain, prompting Solana NFT marketplace giant Magic Eden to chime in.

In support of creators taking control of their secondary sales kickbacks, Magic Eden has introduced something called MetaShield to its platform. With MetaShield, launched in partnership with NFT marketplace and aggregator Coral Cube, NFT creators now have the ability to review listings and sales of NFTs, giving them a recourse of action if collectors bypass royalties.

Although Magic Eden made its intentions to support creators clear, concerns regarding the viability of centralized intermediaries to facilitate the enforcement of royalties led to the September 12 launch of MetaShield, which received mixed reviews. But not in the way we might’ve thought, as it seems both those who are pro- and anti-creator royalties have joined in the conversation surrounding Magic Eden’s latest update.

So what’s the big deal with MetaShield? Why are both camps split even further on the idea of creators being incentivized to protect their NFTs? Let’s explore.

First, let’s talk about MetaShield and what Magic Eden’s new features actually do.

MetaShield presents NFT creators with a new way to protect their NFTs from being sold through methods (or via platforms) that don’t honor creator royalties. As previously mentioned, the new feature is a collaboration with Coral Cube, which means that Magic Eden users will be using Coral Cube’s Inspector to initially gain access to MetaShield.

Through MetaShield, users can review and sort listings and trades of NFTs, which have been implemented with customized royalties. By utilizing Magic Eden’s new features, creators can exclude their NFTs from being listed on specific marketplaces (like those that allow trades without honoring royalties), and even make reversible changes, like watermarking or blurring an NFT’s image or video, and its associated metadata.

How will this directly benefit users? First and foremost, MetaShield is not enforceable by anyone except the creator. In response to nft now’s questions about the new features, a Magic Eden spokesperson said: “It is not our role to define or augment ownership of people’s NFTs. It is ultimately the creator’s choice to deploy MetaShield in order to protect their businesses. We feel strongly that creators should have the right to hold sellers accountable to the terms of their NFTs and have created MetaShield to empower this.”

In addition to editing or shielding an NFT by editing its metadata, creators can use MetaShield to calculate the total debt owed by those who circumvent royalty splits. Debt is calculated by reviewing the gap between royalties paid (or not) versus the royalty amount embedded in the NFT’s metadata by the creator.

Three steps to using MetaShield. Credit: Magic Eden

By shielding an NFT and providing a debt calculation, creators can warn a potential buyer that they’re not honoring creator royalties. And possibly one of the most prominent secondary benefits of these royalty debts being publicly available to all is that they can also be settled by anyone — not only the person who holds a shielded NFT — which leaves room for goodwill to be paid forward.

Yet, while shielding and debt calculation are undoubtedly powerful NFT tools, they essentially give creators the power to hold an NFT ransom, blurring its contents till bad actors, who managed to get around royalties, pay up. This is why both support and opposition have been swift following MetaShield’s launch.

Why is MetaShield a big deal?

Magic Eden’s MetaShield is but a single battle in the creator royalty wars. While the majority of NFT enthusiasts seem to be in favor of creator royalties, there are those — both at the collector and developer level — that believe collectors should get to choose whether or not they pay a tertiary amount back to creators on top of the often high sale prices and transaction fees they already encounter while trading.

Despite advancements in creator royalties, the debate always comes back to who should have the power to create and enforce them. This is precisely why collectors and creators continue to butt heads, leaving platforms feeling forced to pick sides.

Although marketplaces like Yawww have been praised for allowing collectors to dictate their own fees, Magic Eden believes that custom-royalty fee marketplaces stand in opposition to creators, with a spokesperson from the platform saying that these types of marketplaces can do significant damage to NFT creators’ businesses.

“We felt it was important that a tool exists to mitigate such harm,” said the spokesperson, who went on to note that as a collector and creator-focused marketplace, Magic Eden often develops marketplace tools based on the unique and sometimes competing needs of their users. “In this case, the collectors’ need for economical NFT trades stands in contrast to the creator’s need to receive critical royalty payments,” the spokesperson continued.

Regardless of perspective, it can’t be ignored that artists continue to benefit greatly from creator royalties. Before XCOPY saw any significant primary sales, collectors trading his pieces peer-to-peer helped his catalog accrue value. The royalties he received through these secondary sales likely helped sustain his career as he continued to create new art.

And while MetaShield doesn’t fully rectify the outdated model of marketplaces acting as royalty intermediaries, it allows NFT creators to gain a bit of agency in the royalty process. But many collectors feel that Magic Eden allowing creators to police their NFTs is not only a play to increase their market share, but a move that could end up being a threat to decentralization in the NFT space.

Is Magic Eden’s MetaShield the end-all-be-all when it comes to the royalty debate? Of course not; even Magic Eden has acknowledged this. But if a resolution will be reached between collectors who want to dictate their own fees and creators who want to be paid for secondary sales, platforms are going to have to step up to the plate and bat with both camps in mind.

Source – Nftnow.com

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