Web3 Watch: SEC Probes Yuga Labs, DeGods Eliminates NFT Royalties

OpenSea this week added support to the Avalanche (AVAX) chain — its seventh blockchain for NFT transactions. AVAX traders, however, appeared indifferent, considering the token continued its steady decline in an uneven week for digital collectible markets. 

And for gamers out there, the upcoming first-person shooter multiplayer Web3 game Shrapnel recently released its economic white paper outlining its gameplay and in-game assets after dropping a movie-like game trailer.

Here are other notable stories that caught the eyes of the Web3 Watch, starting with Yuga Labs, the creator of Bored Ape Yacht Club (BAYC) NFTs. 

The SEC wants a closer look at the Apes

The SEC has made Yuga Labs its latest target in a series of probes into crypto and Web3 companies. 

The investigation will determine whether sales of its digital assets violate federal securities law. The brand portfolio includes BAYC, Mutant Ape Yacht Club, CryptoPunks, Meebits, the Otherside metaverse and the ApeCoin (APE) token. 

“We hope to partner with the rest of the industry and regulators to define and shape the burgeoning ecosystem,” Yuga Labs said in a statement.

Whatever the outcome, Yuga Labs is the highest-valued NFT company — and the SEC’s decision will likely set an industry precedent.

ApeCoin’s upcoming staking plans on Oct. 31 may have piqued the regulator’s attention. Asked to comment on staking, Yuga Labs told Blockworks that while it was an initial launch contributor of ApeCoin, it is not involved in the independently-run ApeCoin DAO, “so there’s not much we can say on the matter.” 

Within an hour of the SEC’s announcement, APE’s price fell from $5.16 to $4.77 and has continued to decline. 

Yuga, however, keeps trudging through The Swamp and has since announced its commitment of $1 million to supporting education and art initiatives in Miami — the hometown of its co-founders and CEO.

Additionally, Yuga Labs recently assembled the BAYC and MAYC Community Council — made up of seven of the earliest Ape holders. The idea is to keep ears to the ground and compile feedback from the community to relay back to the leadership team. 

DeGods joins the zero-royalties club

DeGods, the most popular NFT project on Solana, tweeted that it is updating all of its NFTs to 0% royalties. DeGods collection will go from featuring 9.99% royalties to zero. 

This “experiment” was done in the name of business. DeGods did not provide additional details. 

Other Dust Labs owned collections, y00ts and t00bs, will also have their royalties updated soon, according to the company. 

The team has yet to reveal its artwork for y00ts, over a month after the initial mint. And the artist behind it and the greater DeGods ecosystem, known as SCUM, recently left the project.

The decision to eliminate the royalty structure calls into question the importance of royalties in the NFT space. Royalties are the payment, denominated in percentages, that NFT creators get every time somebody sells their digital asset. 

For traders, this means lower flipping costs and added incentive to transact. Creators usually get to set their cut taken per sale.

Read more: How NFT Royalties Work – And Sometimes Don’t

Twitter users reacted with skepticism with questions like, “But how will team make money?” to comments like “How about you pay everyone royalties for having your pfp?” 

Founder Frank DeGods responded by acknowledging how people had been labeling them a “dead project & a rug” for months. He stated that: “If royalties go away…I think the space will be more open to redefining what ‘rug’ means.” 

Back in August, NFT artist Beeple weighed in, tweeting, “Creators will have to build a collector base that WANT to honor these royalties.” Treating holders “right” will likely lead to increased support.

Q&A with Unstoppable Domains

Unstoppable Domains, founding member of the Unstoppable Women of Web3 (UWoW3) education group, announced on Tuesday its commitment to onboard over five million women across Latin America into Web3 by 2030 and to accordingly distribute $25 million worth of free NFT domains. 

UWoW3 partnered with Latin America-based organizations CryptoConexión and H.E.R. DAO LATAM to create free educational courses in English, Spanish and Portuguese, along with workshops and hackathons, so female developers can transition to Web3. 

Unstoppable Domains also recently ran a giveaway in collaboration with Abu Dhabi firms to ensure each woman residing in the Emirati capital receives a decentralized domain name. 

Blockworks connected with the company’s Senior Vice President Sandy Carter to discuss Unstoppable Domain’s education initiatives.

Blockworks: Unstoppable Domains recently launched a set of online courses. Why would a student choose UWoW3 educational streams over other academic platforms?  

Carter: UWoW3 educational streams are completely free and feature content from leaders across Web3. For university students, they can be a great resource to immerse themselves in the blockchain space and a supplement to any blockchain-focused academic content. 

Blockworks: Why is UWoW3 now turning to Latin America? Which specific countries are being targeted? 

Carter: When we launched our educational streams, one of the top requests we got was to provide content in Spanish. We’d also heard from Monica Talan, founder of CryptoConexión, who was excited to partner with Unstoppable Women of Web3 to bring our mission into Latin America. All universities that meet a set criteria will be eligible for free domains. Our first hackathons will take place in countries in Latin America with larger populations, and we’ll work with local partners to hold events in other countries. 

Blockworks: While Latin American countries have embraced crypto largely due to necessity amid unstable economies, what specific skills or fields within the blockchain industry does Unstoppable Domains think that users in Latin America should focus on?

Carter: There are a wide range of topics in Web3 that are worth exploring, from how to mint your first NFT to developing for the blockchain. Our Web3 courses in Spanish offer topics at a range of levels, so we can support people on their journey whether they’re just learning about Web3 or are ready to start building in the space.

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