The end of NFT royalties is a good thing.
Web3 and NFT projects were built in a world that relied on royalty payments. But those royalties are going away, and a lot of people are worried about how their projects will survive without the revenue they generated.
The latest example in this regard is the move from @LooksRare platform.
Let's face it: NFTs have not lived up to their promise. We've been waiting for the "Web 3.0" we were promised, but all we've seen are cool artworks and in most cases - useless tokens.
The problem is that incentives were misaligned in NFT projects. Project teams were incentivized to get as many users as possible trading their NFT tokens, but that meant churning out new tokens without regard for customer needs or long-term vision.
It was all about getting money from trading fees, so they didn't care about delivering value to customers or building an ecosystem around their token—they just wanted more trading volume so they could collect more fees!
We need to change our thinking about how these tokens work and what they're for if we want them to succeed in the long term.
The end of royalties will help us do that by forcing project teams to rethink incentives and focus on delivering value instead of just focusing on trading volume.
One of our clients was growing their community, but they weren't sure how to keep growing. They had built a strong community around their NFT-based project, but the time had come for them to move beyond just trading, especially with the end of royalties on the horizon.
We recommended that needed a strategy that would allow them to grow their community while aligning it with the project's growth goals. This would require a solution that would be beneficial for both parties i.e. the project team and the community.
We worked together to develop a long-term vision and a strategy to reach that vision while engaging and benefiting the community. This allowed them to leverage their existing community and grow in accordance with their own goals in a true web3 manner rather than focused on royalties.
