OpenSea, which was founded in 2017, is the largest NFT marketplace in the world. All NFT purchases on the platform are done in ETH.
One of the most unique aspects of OpenSea is that artists can set royalties for their artwork on the platform. It ensures that they still earn a commission from the secondary sales of their art.
Here is a quick guide on how royalties work on OpenSea.
OpenSea Royalties – How They Work?
On OpenSea, NFT creators can program smart contracts so that each transaction comes with royalties.
It allows the creator to earn a fair reward for their work. Since each transaction is traceable on the blockchain, royalties are paid to NFT creators each time the artwork moves.
OpenSea allows creators to set the royalties as high as 10% per transaction.
To set royalties, creators simply visit the collection editor and adjust the percentage fee field. The maximum amount is 10%. Creators need to specify a payout address where the fees will be sent.
On OpenSea, all royalties go to a single address. The platform also applies royalties for primary sales, which means sales made by the creator on the platform.
However, the amount is sent back to the creator after 2-4 weeks.
Royalties are sent to a payment address set by the collection’s editor.
Users can view royalty payouts using the royalties button in the collection editor section.
The Fees On OpenSea
On OpenSea, setting up a page, and listing a digital asset is free. The platform will get a 2.5% fee for every successful transaction. Gas fees are paid by buyers since the transaction is processed on Ethereum.
Sellers will get ETH in their wallet, which is processed and the revenue distributed once a month to an address specified by the seller.
Gas fees are a bit complicated. For instance, if a seller accepts an offer, they are the ones who pay the gas fee since they are the ones transacting with the network.
However, if the buyer clicks “buy now”, they are the one to pay the gas fee.
If a transaction fails due to insufficient gas fees, OpenSea will notify you that it failed. For instance, if an item is on auction for 7 days and no one has placed a bid, there is no gas fee paid and it will return to the collection.
For those creating a collection for the first time, there is a fee of $50-$60. It allows creators to add as many NFTs to the collection as possible.
The fee is considered a one-time fee for initialization. Once the item is posted on OpenSea, its traits cannot be adjusted.
On OpenSea, the platform uses the lazing minting model. It allows users to upload a digital asset and have it appear on the market.
At the time, the item was not tokenized. Thus, no gas fees are paid.
When the item is transferred by the seller or buyer, whoever accepts or completes the transaction will pay the gas fee to mint the NFT.
OpenSea Royalties – Summary
OpenSea is a great marketplace with lots of activity, which ensures relatively high liquidity.
Sellers have numerous options when selling on the platform, they set the price as fixed, auction it, or buddle off numerous.