OpenSea has dropped its fees to zero following the rise of NFT marketplace competitor Blur.
On Saturday, OpenSea announced it will temporarily eliminate its 2.5% fee on sales, as well as making creator earnings optional.
We’re making some big changes today:— OpenSea (@opensea) February 17, 2023
1) OpenSea fee → 0% for a limited time
2) Moving to optional creator earnings (0.5% min) for all collections without on-chain enforcement (old & new)
3) Marketplaces with the same policies will not be blocked by the operator filter
The platform will only enforce a 0.5% mandatory creator royalty fee on NFT trades for projects that "do not use on-chain enforcement (old and new)." Creator royalty fees are usually 5% to 10% of the sale price.
"~80% of total ecosystem volume does not pay full creator earnings, and the majority of volume (even accounting for inorganic activity) has moved to a zero-fee environment," OpenSea tweeted.
OpenSea's drastic move, which ultimately cuts off its main revenue stream, comes in response to competitor Blur's rise.
In a Twitter thread, OpenSea made no attempt to hide its Blur threat. Opensea tweeted that "Blur’s decision to roll back creator earnings (even on filtered collections) and the false choice they’re forcing creators to make between liquidity on Blur or OpenSea – prove that our attempts are not working" was a reason for its fee cut.
5/ Recent events – including Blur’s decision to roll back creator earnings (even on filtered collections) and the false choice they’re forcing creators to make between liquidity on Blur or OpenSea – prove that our attempts are not working.— OpenSea (@opensea) February 17, 2023
Blur quickly caught the attention of the NFT world after releasing its native token BLUR on Tuesday. Some 100,000 NFT traders were airdropped the token. One day later, its trading volume surpassed OpenSea's for the first time since its launch in October.
OpenSea had launched a royalty enforcement tool in November that prevented collections to from being resold on marketplaces which do not enforce royalties including Blur.
In January, Blur found a loophole in OpenSea's tool, allowing collections to retain their royalty percentages on Blur.
On Wednesday, Blur released a blog post titled "How to earn royalties on Blur" advising creators to block NFT trades.
"Creators that whitelist both OpenSea and Blur should be able to earn royalties on both platforms,” the company said. “Today, OpenSea automatically sets royalties to optional when they detect trading on Blur. We would like to welcome OpenSea to stop this policy, so that new collections can earn royalties everywhere.”
OpenSea has long maintained a monopoly in the NFT space, commanding 48% market share. However, Blur has rapidly caught up, capturing 30% of the market. It's certainly refreshing for NFT artists to finally break away from the monopoly to a viable platform competitor.