Immutable X

The Ethereum Layer 2 scaling solution Immutable X has announced plans to extend its enforceable NFT royalties model across the web3 ecosystem. Immutable X intends to shield the creator economy by making royalties enforceable on-chain for the first time.

Immutable X Expands Enforceable Royalties To ETH

In a November 4 press release, the Ethereum Layer 2 scaling solution confirmed plans to extend its enforceable NFT royalties functionality to products built on the metaverse, starting with Ethereum-based products.

According to Immutable X, the move represents the first step in establishing industry-wide standards around enforceable royalty payouts. Moreover, the action will also shield more than $1.8 billion in creator royalties.

The subject of creator royalties appeared when many NFT marketplaces recently opted to make NFT royalty payments optional, with even some removing them altogether to compete on fees.

Sudoswap NFT marketplace is a perfect example. It recently stirred up heated debate challenging the concept of creator royalties after launching its automated market maker that completely removed royalty payments on secondary transactions.

The decentralized exchange wanted to tease active traders and speculators by removing royalties and thus offer better pricing. The DEX believed it would attract massive adoption amongst the NFT trader community.

Immutable X Defends NFT Royalties

Immutable X has strongly condemned any move to remove creator funds, citing that scrapping royalties’ fees could carry profound implications for NFT monetization, not least for creators who rely on them as a source of income.

In the same context, Alex Connolly, the Co-founder of Immutable X, maintained they envisioned establishing an ecosystem giving creators a choice over their royalty model. Moreover, it will create a platform allowing users to stand on their feet when it comes to the projects they feel strike the best balance.

According to Connolly, the soft-enforceable royalties punish users trying to support projects and massively reduce the confidence creators, and game studios can have in their revenue streams.

Immutable X believes that creators, users, and marketplaces should explore the royalty design space together. In that context, it intends to establish a working group with key industry leaders, including NFT marketplaces, games, and creators, to establish an enforceable royalty mechanism with good standards.

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