$1.6 billion Solana NFT Marketplace Unicorn Makes Massive Mistake
Could it cost them a piece of the billion dollar creator economy?
Magic Eden, the primary Solana NFT marketplace, has stated That it will discontinue supporting NFT royalties and make them optional.
However, If they can avoid it, very few buyers would choose to pay more money, according to the data. So what this means is that NFT artists on Solana are not making any money from royalties.
Making creator royalties optional could become a compounding mistake as millions of creators will look elsewhere for monetization opportunities.
This is a devastating blow to the entire Solana ecosystem, built around NFT projects like Degen Ape Academy launching their platform and building communities on their blockchain.
This news was met with immediate backlash from the Solana community, with many accusing Magic Eden of "killing" the ecosystem by taking away artists' only source of income.
Broccoli DAO, for example, a project built on top of Solana, claims a $27,000 loss that could lead to the death of their project.
Now, with one fell swoop, Magic Eden has effectively killed the goose that laid the golden egg. It remains to be seen how the Solana community will react to this news long term, but one thing is for sure: things are about to get very interesting.
Solana has excellent branding and has done a great job in the crypto culture wars.
However, the tech is questionable, according to many, as evidenced by their inability to stay online (don't shoot the messenger).
The creator royalty situation highlights the technical deficiencies even more, as royalties can't be enforced at the protocol level.
There's a lot at stake here as the growing creator economy currently sits at 50 million.
As the future of work changes, the creator economy will be trillions – How much could this cost Solana and Magic Eden?
Additionally, the Ethereum killer segment is getting crowded. How many faster, cheaper Ethereums does it take to kill Ethereum?
Solana had one hell of a headstart. With the blockchain outages and now removing creator royalties, they stand to lose major network effects that come with artists launching projects on their blockchain.
You can read more about the technical implications here.