Shalini Nagarajan

Bored Ape Yacht Club (BAYC) creator Yuga Labs has blacklisted addresses from marketplaces that don’t support royalties for NFTs like its latest Sewer Pass mint.



Differing perspectives on <a href="https://blockworks.co/news/web3-nft-ape-dao-hot-wheels">the enforcement of creator royalties</a> has been a hot topic among NFT stakeholders, including marketplaces, some of which <a href="https://blockworks.co/news/sudoswap-erupts-as-nft-traders-capitalize-on-royalty-free-sales">have decided to make them optional</a>.&nbsp;



BAYC had already announced that the Sewer Pass NFT will be listed on OpenSea, which <a href="https://docs.opensea.io/docs/10-setting-fees-on-secondary-sales#:~:text=That%20means%20a%202.5%25%20fee,in%20the%20My%20Collection%20editor." target="_blank" rel="noreferrer noopener">enforces royalties</a> for projects.



&#8220;We’ve always been a creative-first company, and we believe that creator royalties must be protected,&#8221; a Yuga Labs spokesperson told Blockworks via email. &#8220;The Sewer Pass free claim will only be traded on platforms respecting creator royalties.&#8221;



LooksRare, Sudoswap, Blur and NFTX have all opted to stay away from the NFT royalty model, instead leaving the option to the buyers to decide whether to honor an artist’s royalty policy. Blockworks has reached out for comment.



Certain conditions in the Sewer Pass <a href="https://etherscan.io/address/0x849b59222d093011726d829475C81C79F90ed932#code" target="_blank" rel="noreferrer noopener">smart contract</a> include a blocklist of certain wallet addresses, which were noticed by the crypto community and <a href="https://twitter.com/locationtba/status/1615792932296196096" target="_blank" rel="noreferrer noopener">shared</a> on Twitter.&nbsp;



Some of those addresses appear to be linked to marketplaces like LooksRare, NFTX, Blur and SudoSwap.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Was taking a read through <a href="https://twitter.com/yugalabs?ref_src=twsrc%5Etfw">@yugalabs</a> Sewer Pass contract, and saw that it&#39;s referencing a contract that was deployed a week ago. The contract is labeled as a Registry and there&#39;s a bunch of transactions adding to the blocklist. Presumably one of the addresses is <a href="https://twitter.com/blur_io?ref_src=twsrc%5Etfw">@blur_io</a>&mdash; location tba (@locationtba) <a href="https://twitter.com/locationtba/status/1615792932296196096?ref_src=twsrc%5Etfw">January 18, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<a href="https://blockworks.co/news/nft-royalties-sometimes-they-work-sometimes-they-dont">NFT royalties</a> are essentially payouts to creators, offering them a cut from the secondary sale of their digital assets on a marketplace. Beeple, one of the best-known NFT creators, himself gets a <a href="https://www.reuters.com/lifestyle/digital-only-artwork-fetches-nearly-70-million-christies-2021-03-12/" target="_blank" rel="noreferrer noopener">10% royalty</a> each time his NFTs are resold after the initial sale.



The <a href="https://icy.tools/collections/sewer-pass/overview" target="_blank" rel="noreferrer noopener">Sewer Pass</a> is a key providing access to Yuga’s skill-based interactive game <a href="https://twitter.com/BoredApeYC/status/1613331130249256962" target="_blank" rel="noreferrer noopener">Dookey Dash</a>, a game in which players will face obstacles testing their survival until top scorers can earn rewards.&nbsp;



The pass has four tiers, depending on the kind of NFTs the holder has. The floor price for a Tier 1 pass last stood at 1.4 ETH as of Thursday, while Tier 4 was selling for around 420 ETH. Currently, a <a href="https://opensea.io/" target="_blank" rel="noreferrer noopener">trending</a> collection, it’s already captured 6,510 ETH ($9.9 million) in sales volume since going live on Wednesday.



Yuga isn’t the only one to block marketplaces for their policy. NFT artist Tyler Hobbs added X2Y2 to a blacklist in his QQL collection due to its flexible royalty model. X2Y2 eventually <a href="https://twitter.com/the_x2y2/status/1593631425483657216" target="_blank" rel="noreferrer noopener">changed its decision</a> and followed OpenSea’s model.



This story was updated on Jan. 19, 2023 at 12:22 p.m. ET, with a statement from Yuga Labs.



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Yuga Labs Blacklists Royalty-avoiding Marketplaces

Ornella Hernandez

NFTs may have taken a nosedive in popularity this year, but they haven’t completely left the chat.



Investor sentiment, driven by investor speculation, has cooled down since “panic” mode struck in May 2022 at the start of the bear market.&nbsp;



Weekly volume levels of marketplace activity exploded in January and remained elevated until the second week of May, when the <a href="https://blockworks.co/news/do-kwon-breaks-silence-terra-luna-was-essentially-my-life" target="_blank" rel="noreferrer noopener">Terra ecosystem crashed to zero</a>. The second half of 2022 then saw both trading volume in ether and number of users gradually decline back to early 2021 levels, according to <a href="https://dune.com/queries/1787028/2944471" target="_blank" rel="noreferrer noopener">Blockworks Research</a>. 



But the trend changed markedly in December, a month of renewed activity thanks to a few popular projects, such as the <a href="https://blockworks.co/news/starbucks-nfts-like-loyalty-cards" target="_blank" rel="noreferrer noopener">Starbucks NFT loyalty program launching their beta</a> and former US President Donald Trump’s NFT “trading cards” on the Polygon PoS chain. 



Increased minting of gaming NFTs on <a href="https://www.blockworksresearch.com/glossary#immutable-x" target="_blank" rel="noreferrer noopener">ImmutableX</a>, as well as Pudgy Penguins’ floor price flipping Doodles, are also notable events from this month. At the time of writing, Pudgy Penguins’ floor is 7.1 ETH and Doodles NFTs start at 6.9 ETH. 



The year-over-year trend is still way down this month, however; Cryptoslam.io <a href="https://www.cryptoslam.io/nftglobal?month=2022-12" target="_blank" rel="noreferrer noopener">data indicates</a> that global NFT sales generated $2.77 billion in December 2021. So far in December 2022, approximately $445.3 million has been registered in global NFT sales volume.



“I would say volume is pretty much non-existent since mid 2022,” said Blockworks research analyst Sam Martin. “You could even argue it’s been propped up thanks to new NFT marketplaces that people are trying to game to receive an airdrop like Blur or SudoSwap.”



SudoSwap’s creator royalty-free model sparked a massive debate on the value of NFT royalties when it arrived on the scene in August. Some marketplaces like Magic Eden tried a royalty-optional model before employing an open-source royalty enforcement tool, while <a href="https://blockworks.co/news/nft-creators-looking-for-royalties-face-an-uphill-battle-galaxy" target="_blank" rel="noreferrer noopener">OpenSea ended up enforcing royalties</a> by blocking transactions with smart contracts associated with 0% royalty platforms.



In any case, Spencer Gordon-Sand, founder of NFT-focused fund Spencer Ventures, is “surprised and encouraged by how well everything is holding up” given that the industry is going through its first bear cycle.



“The fact that none of the top projects had significant direct exposure to the FTX blowup is insane,” referring to profile picture (PFP) projects such as Bored Ape Yacht Club or Azuki or Moonbirds.



<h3 class="wp-block-heading">Blur’s impact becomes clear</h3>



Dec. 10 actually marked the first time since May that there had been more than 30,000 ETH of volume. The director of research at Proof.xyz, NFTstatistics.eth, <a href="https://twitter.com/punk9059/status/1601817634084835328?s=20&amp;t=6syksUSSg9oQ2tNzbTD88w" target="_blank" rel="noreferrer noopener">tweeted</a> that over 70% of ETH volume occurred on the Blur marketplace for blue chip collections in particular. 



<figure class="wp-block-image"><img decoding="async" src="https://lh3.googleusercontent.com/1fUHapZmxi10vPsNUacx8vpO7Hp9ZMyh_j01tpybR41B2v6NZBIwB-kvPcOnVatTaxp0QFbjCrYvM275S3CID9XV4_vxgV_Yrm5YsKBE6O5AfnkVNmGpMAl1LK6beIrCmwoaKnIrV3N_1kBj1WMDkiAPZEOQsRk2NoFnvJPp1Ar7yuAcs0R7U-soyKADdw" alt=""/><figcaption class="wp-element-caption">Daily NFT sales volume in ETH in December | Source: NFTGo</figcaption></figure>



“In the last year, a lot of people who were in the right place at the right time just rode the wave and got lucky,” Gordon-Sand added. “Now it’s much harder, but we are seeing the strongest founders rise to the top.”



<a href="https://blockworks.co/news/more-value-in-digital-collectables-than-their-physical-counterparts-nft-marketplace-ceo-says" target="_blank" rel="noreferrer noopener">Dibbs</a>, a blockchain-enabled fractional trading card marketplace, recently <a href="https://twitter.com/dibbs_io/status/1598319758012829703?s=20&amp;t=tFcRh609iNiBH9puKalBlA" target="_blank" rel="noreferrer noopener">commissioned</a> an “NFT Sentiment Report,” which surveyed hundreds of NFT adopters. The survey found that 84% of respondents would purchase NFTs if they are redeemable for physical items. 



This shows there is demand for collectibles with both physical and digital utilities, in addition to the NFT PRP asset class. Collections such as Nike’s RTFKT Cryptokicks iRL created sneakers with chips in them connecting the physical product to the digital asset via the RTFKT mobile app. Since launching on Dec. 11, the collection has generated 62.47 ETH or $7.5 million, <a href="https://opensea.io/collection/rtfkt-cryptokicks-irl/analytics" target="_blank" rel="noreferrer noopener">according</a> to OpenSea analytics.



If the December trend holds up in 2023, propelled by growing excitement for Web3, metaverse technology, further adoption of NFT loyalty programs and in-game digital assets, the NFT market may return to early 2022 levels of activity.



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NFT Collector Sentiment Inches Up in December

Casey Wagner

<div id="highlights-block_6352c79fd7364" class="highlights">
 <ul>
 <li>More marketplaces are leaning toward the zero-royalty model </li>
 <li>Sellers are responsible for paying the artist’s cut for secondary sales</li>
 </ul>
 
</div>



To date, Ethereum-based NFT creators have raked in more than $1.8 billion in royalties, according to data compiled by Galaxy Digital.&nbsp;&nbsp;



<a href="https://cms.blockworks.co/nft-royalties-sometimes-they-work-sometimes-they-dont/">Royalty payments</a>, the percentage that creators collect on secondary sales, are mostly concentrated to a select number of NFT projects, with 428 collections accounting for 80% of the royalties earned. 



The highest-earning entity, according to Galaxy, is Yuga Labs, the blockchain company behind the Bored Ape Yacht Club and Otherside NFT collections, among others. Yuga Labs collections have earned a total of more than $147.6 million in royalties. 



Read more: <a href="https://cms.blockworks.co/nft-royalties-sometimes-they-work-sometimes-they-dont/">How NFT Royalties Work – And Sometimes Don’t</a>



“Until recently, NFT royalties have been an opaque aspect of NFT trading,” Galaxy researchers wrote in a <a href="https://www.galaxy.com/research/insights/nft-royalties/" target="_blank" rel="noreferrer noopener">report</a> published Friday.&nbsp;



NFT creators receive their royalties from the seller, not the buyer, similar to real estate transactions in traditional markets.&nbsp;



Royalties are not currently programmed into smart contracts, making it difficult to track payments. Smart contract transfer mechanisms cannot be relied upon to calculate royalty payments because these functions also are used when collectors transfer NFTs between their own wallets.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The only way an NFT royalty could be programmed into a smart contract is if the program somehow knew precisely when an owner is transferring an asset between his/her own wallet or selling an NFT to a buyer,” the researchers noted.&nbsp;</blockquote>



Because a decentralized royalty payment system is not yet functional, NFT marketplaces have taken on the role of facilitating royalty payments.&nbsp;



<a href="https://cms.blockworks.co/crypto-wallet-maker-ledger-sells-nfts-becomes-top-opensea-project/" target="_blank" rel="noreferrer noopener">OpenSea</a> only began showing royalty amounts during the checkout process in <a href="https://twitter.com/opensea/status/1448362715760713731?s=20&amp;t=ai9zbl9W6W0BBCQZtN3enQ" target="_blank" rel="noreferrer noopener">October 2021</a>. The popular NFT marketplace has also doubled its average royalty payout in the past year, increasing from an average of 3% to 6% paid to artists.&nbsp;



Other marketplaces, such as <a href="https://cms.blockworks.co/sudoswap-erupts-as-nft-traders-capitalize-on-royalty-free-sales/" target="_blank" rel="noreferrer noopener">Sudoswap</a>, pay artists no royalty fees at all in an effort to appeal to sellers and attract traders.&nbsp;



“Buyers often need a price increase of 10% to just break even,” Sudoswap said on <a href="https://twitter.com/sudoswap/status/1545535672240390145?s=20&amp;t=uCntDbTuYAUncxuHWr8i_Q" target="_blank" rel="noreferrer noopener">Twitter</a> in response to the decision to move to a zero-fee structure. “Trading on sudoswap means you only pay a 0.5% fee versus the usual 7.5% (2.5% + 5% royalty) fee on other platforms, enabling better price discovery.”



<a href="https://cms.blockworks.co/web3-watch-sec-probes-yuga-labs-degods-eliminates-nft-royalties/" target="_blank" rel="noreferrer noopener">DeGods</a>, the most popular NFT project on Solana, became the latest to join the no-royalties club earlier this month when the team decreased its royalty payment from 9.99% to 0%.



Royalties have been touted as a reason to invest in digital art since NFTs came on the scene, Galaxy researchers point out. Removing this model would significantly change one of the defining features of the industry.&nbsp;



“Until NFT royalties came into the picture, artists traditionally only made money from primary sales of their works,” researchers wrote. “That restrictive economic paradigm ensures that artists, especially those whose work may be seen as too revolutionary for their time, are unable to grow their revenue stream as their work gains recognition.”



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NFT Royalties Top $1.8 Billion: Galaxy Digital

Bessie Liu

<div id="highlights-block_6312249aee08f" class="highlights">
 <ul>
 <li>Although announcements have been made, the SUDO token has not yet been deployed</li>
 <li>The Ethereum-based token will initially be non-transferable until a governance vote determines otherwise</li>
 </ul>
 
</div>



Decentralized NFT marketplace <a href="https://cms.blockworks.co/?s=Sudoswap" target="_blank" rel="noreferrer noopener">Sudoswap</a> is laying the groundwork for a massive airdrop of 60 million SUDO tokens, an up-and-coming governance token built on the protocol.



At its core, Sudoswap allows users to use liquidity pools to buy and sell NFTs (non-fungible tokens) — similar to how <a href="https://cms.blockworks.co/tag/uniswap/" target="_blank" rel="noreferrer noopener">Uniswap</a> participants provide liquidity to pools and earn money from trading fees. The SUDO governance token will allow holders to participate in protocol governance and ensure the organization moves in the right direction.



The Ethereum-based token will initially be non-transferable, <a href="https://blog.sudoswap.xyz/sudo-distribution.html" target="_blank" rel="noreferrer noopener">a blog post</a> by Sudoswap said. This is to ensure that SUDO will not be circulated unless there is sufficient governance participation from SUDO holders.



“A governance proposal to initiate transferability may be put forward through the standard governance process for the sudoAMM protocol, which will be addressed at a later time,” the blog said.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">This post outlines the distribution of SUDO, the governance token of the sudoAMM protocol. <a href="https://t.co/aGwNWSDaB6">https://t.co/aGwNWSDaB6</a> NOTE THAT THE SUDO TOKEN GOVERNING THE SUDOSWAP PROTOCOL HAS NOT YET BEEN DEPLOYED. PLEASE EXERCISE CAUTION&mdash; sudoswap (@sudoswap) <a href="https://twitter.com/sudoswap/status/1565508305312571392?ref_src=twsrc%5Etfw">September 2, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The plurality of SUDO tokens (41.9%) will be available for distribution to XMON holders — a utility token behind NFT project 0xmons — a scarce digital collectible inspired by a mix of Pokemon, SCP and Lovecraft that lives on the Ethereum blockchain.



XMON holders will have a one-month window to decide if they want to receive SUDO. Those who wish to hold the governance token must lock away their XMON tokens for three months before withdrawal — a necessary step, as it will indicate their willingness to participate in sudoAMM governance.&nbsp;



“XMON will retain 100% of its functionality and will in no way be altered by the locking mechanism, except that the locked XMON will not be transferable during the locking period,” the blog post said. “The SUDO distributed is pro-rata to the amount of XMON locked, at a rate of 10,000 SUDO per 1 XMON locked.”



Of the remaining 58.1% of SUDO tokens, 15% will be given to the initial founding team of Sudoswap; another 15% will be distributed to SudoRandom Labs, a primary contributor to the sudoAMM protocol; and 25% will be given to the treasury governed by SUDO holders.



0xmons NFT holders and retroactive liquidity providers will each receive 1.5% of the initial SUDO supply.



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Sudoswap Is Getting a New Governance Token

David Canellis

<div id="highlights-block_62fca6686595c" class="highlights">
 <ul>
 <li>Sudoswap’s total value locked has jumped from $120,000 to $3 million over the past month</li>
 <li>NFT owners can bypass artist and creator royalties by launching liquidity pools on Sudoswap</li>
 </ul>
 
</div>



The NFT ecosystem has relied on centralized marketplaces, most prominently OpenSea, for practically its entire existence. Now, decentralized alternative Sudoswap is gaining traction — fast.



Sudoswap aims to shake up NFT trading with automated market making (AMM) algorithms and liquidity pools, echoing premiere Ethereum decentralized exchange (DEX) Uniswap.&nbsp;&nbsp;



Poor liquidity and slippage has long plagued NFT markets. A CryptoPunk might sell for $100,000 on one day but not garner similar offers for weeks or months — leaving investors confused over exactly how much it’s worth.



With its own brand of AMM, Sudoswap allows NFT traders to buy and sell without having to wait for an offer. Sellers contribute their crypto as liquidity to facilitate smoother automated trades, with orders settling with the pool rather than an individual, all on-chain.



“Each user who wants to sell an item deposits one or more NFTs into a pool which they control the pricing over, and the actual purchases happen across all of the pools,” Owen Shen, Sudoswap’s founder, explained on a <a href="https://www.youtube.com/watch?v=BPgkPl5TQOU" target="_blank" rel="noreferrer noopener">podcast</a> in May. 



Shen added: “You can set a pool with a higher pricing, but it&#8217;s the same as listing an item at a higher price — users will buy elsewhere if there’s cheaper items on the market.”



<h3 class="wp-block-heading">NFT traders are into the idea</h3>



In essence, each NFT listing on Sudoswap is actually its own pool, and every seller is solely responsible for providing liquidity to those pools. Users can set NFT values and other parameters for their pools — such as selling NFTs on a bonding curve that slowly increases as pieces are bought.&nbsp;



With Sudoswap, traders can quickly buy and sell NFTs across all pools, allowing for more immediate price discovery and reducing the threat of being stuck with an illiquid asset.



NFT traders seem onboard with the experiment; over the past month, Sudoswap’s total value locked inside its liquidity pools has skyrocketed 2,400%, from $120,000 to $3 million, <a href="https://defillama.com/protocol/sudoswap" target="_blank" rel="noreferrer noopener">DeFi Llama</a> data shows. 



Overall, the platform’s AMM has facilitated trades of more than 60,000 NFTs across nearly 29,000 transactions since early July, representing $16.5 million in trade volume, per a Dune Analytics <a href="https://dune.com/ff336/sudoswap-or-sudoamm" target="_blank" rel="noreferrer noopener">dashboard</a>. 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="627" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screen-Shot-2022-08-17-at-10.49.34-1024x627.png" alt="" class="wp-image-27360" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screen-Shot-2022-08-17-at-10.49.34-1024x627.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screen-Shot-2022-08-17-at-10.49.34-1024x627.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screen-Shot-2022-08-17-at-10.49.34-1024x627.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screen-Shot-2022-08-17-at-10.49.34-1024x627.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screen-Shot-2022-08-17-at-10.49.34-1024x627.png?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screen-Shot-2022-08-17-at-10.49.34-1024x627.png?w=420 420w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screen-Shot-2022-08-17-at-10.49.34-1024x627.png?w=426 426w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screen-Shot-2022-08-17-at-10.49.34-1024x627.png?w=357 357w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screen-Shot-2022-08-17-at-10.49.34-1024x627.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screen-Shot-2022-08-17-at-10.49.34-1024x627.png?w=50 50w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></figure>



For scale, OpenSea <a href="https://dune.com/rchen8/opensea" target="_blank" rel="noreferrer noopener">processed</a> roughly $800 million in NFT trades over the same period. So, there are still ways to go for Sudoswap to catch up to the big dog.



But the power of Sudoswap is that it removes pesky intermediaries, for better or worse. Centralized NFT platforms frequently bow to copyright strikes, stopping auctions in their tracks.



In fact, OpenSea triggered debate over the line between art, freedom of expression and plagiarism when it <a href="https://www.theverge.com/2021/12/30/22860010/bored-ape-yacht-club-payc-phayc-copycat-nft" target="_blank" rel="noreferrer noopener">banned</a> “flipped” Bored Ape Yacht Club (BAYC) collections. It’s done the same with overtly <a href="https://www.trustnodes.com/2021/11/22/alt-right-nft-banned-from-opensea" target="_blank" rel="noreferrer noopener">offensive</a> NFTs, as is its prerogative. 



Sudoswap could do similar filtering via its front-end web app, <a href="https://cms.blockworks.co/defi-web-apps-block-users-hit-by-tornado-cash-dust-attack/" target="_blank" rel="noreferrer noopener">echoing those</a> of major DeFi protocols in the wake of the Tornado Cash sanctions.



<h3 class="wp-block-heading">Royalty-free NFT trading on Sudoswap could undermine artists</h3>



Sudoswap does not pay any royalties to creators on NFT trades. Unlike OpenSea which pays on average 5% to NFT issuers on secondary sales, while keeping an additional 2.5% for itself, Sudoswap charges just 0.5% fees on trades, funds it sends to its treasury, not creators.



The platform’s low fees, on top of its liquidity pool structure, has become attractive for traders, but whether NFT creators and artists feel the same way is another story.



The bulk of NFT revenues usually comes from initial sales, but royalty payments on secondary trades have long been one of the primary sales pitches of the NFT ecosystem.



And in the case of industry giants such as Yuga Labs, they definitely don’t hurt. The floor <a href="https://nftpricefloor.com/bored-ape-yacht-club" target="_blank" rel="noreferrer noopener">price</a> for its BAYC tokens is currently 77 ETH ($145,000), and 2.5% royalties means it would net at minimum around $3,600 per trade. 



Over the past 30 days, 368 BAYC trades have been <a href="https://cryptoslam.io/bored-ape-yacht-club" target="_blank" rel="noreferrer noopener">recorded</a>, according to CryptoSlam. So, the back-of-the-napkin math works out to be $1.3 million in BAYC royalties for Yuga Labs over the past month alone. (Yuga Labs declined to comment for the purposes of this article.)



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">I am 100% certain that &quot;not paying royalties&quot; is not a sustainable competitive advantage for Sudoswap. If it &quot;works&quot; in any significant way it will be copied. So people should state their views on royalties assuming every market evolves to a common approach&mdash; 6529 (@punk6529) <a href="https://twitter.com/punk6529/status/1558538350621036546?ref_src=twsrc%5Etfw">August 13, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption>Prominent NFT figure @punk6529 weighs in on Sudoswap.</figcaption></figure>



“I haven&#8217;t seen many individual artists or creators opt into Sudoswap yet,” Derek Edward Schloss, co-founder of FlamingoDAO, told Blockworks.



“I think most of the volume so far has been NFT owners creating their own pools, bypassing the artist and creator entirely,” he said.



One artist Blockworks spoke to said they wouldn’t be phased if the entire ecosystem adopted royalty-free trading, however. They’ve sold dozens of items on which they forgot to set royalties and aren’t terribly upset whenever one of them re-sells.



If Sudoswap and its royalty-free trading truly catches on, artists will likely need to adjust how they price their work — making mints more expensive or simply focusing on moving volume themselves, Jake Stott, CEO of Web3 creative agency Hype, told Blockworks.



“My inkling is that royalty-free marketplaces will prove to be better-suited for NFT collections by big brands, like the Coca-Colas and NBA Top Shots of the world,” Stott said. “Unlike artists, brands might be keener on forgoing royalties as NFTs can be more of a community and brand building tool for them — and not a direct stream of revenue.&#8221;



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