Magic Eden is breaking up...with optional royalties

GM. There's been a crazy rally in the crypto markets this week. Are we at the cusp of a new up cycle or an echo bubble? Only time will tell. Let's get right into it.

Today we cover:

• How bad is wash trading on LooksRare? (Hint: It's not good)

• Magic Eden breaks up... with optional royalties

• Today's Most Interesting Tweets

Btw, if you're interested to get free access to Arkham, a powerful data-intelligence tool that has gotten rave reviews recently, just drop us a reply with your email address. We have 10 invites to give out, first-come-first-served.

Rampant Wash Trading on LooksRare

(h/t @jhackworth, @spencernoon)

Came across a pretty shocking statistic: The top 10 buying wallets on LooksRare, an NFT marketplace, are responsible for 94% of the total volume in the past 6 months.

Most of us are aware that most of LooksRare's trading volume is due to wash trading but we didn't think it would be this rampant. With many new competitors all jostling for users, LooksRare appears to be a marketplace that is losing rather than gaining market share.

Wash trading = Traders making "fake" NFT trades between their own wallets to earn token trading rewards

Magic Eden Breaks Up...With Optional Royalties

💲 What to know: Magic Eden (ME) announced today that it will support and protect royalties for NFT projects using Metaplex's new royalty enforcement solution. ME is the Number 1 NFT marketplace on Solana.

☘️ In the weeds: Many NFT collections on Solana are launched using Metaplex. When NFT collections upgrade to Metaplex's new royalty enforcement solution, creators will be able to specify which programs will be able to interact with their NFTs.

This means creators can blacklist marketplaces that do not support royalty payments, forcing owners of their NFTs to trade only on marketplaces that support and enforce royalties (like ME).

Some users like Jack here are clearly upset that Magic Eden is back to enforcing royalties. And it's understandable — traders have to pay a hefty royalty every time they buy and sell an NFT. It eats into your profits when do you multiple trades a day.

🤑 Why it matters: It's been a very messy situation over the past 6 months. Marketplaces have yo-yo-ed back and forth between optional royalties and enforcing royalties. At one point, it almost seemed as though royalties were no longer going to be a thing, as many marketplaces decided to make them optional.

But the trend of on-chain royalty enforcement tools is catching on now. OpenSea and Magic Eden, two of the largest NFT marketplaces, are throwing their support behind these tools.

While this is good news for creators who rely on royalties to make a living, it throws into question: What does an NFT really stand for? Do you truly own your NFT if a third party can decide which programs your NFT can interact with?

It's almost like a step backward into the centralized, permissioned world that crypto and blockchains are here to disrupt. Hopefully, we'll find better answers in the coming year.

Today's Most Interesting Tweets

🐥 Paying to "acquire" NFT projects is the next in-thing

🐥 2023 NFT predictions — Part 1

🐥 Art: Alphadoggg (art membership pass)

🐥 Art: Interesting new conceptual project

🐥 Art: Pleasr.House announcement tomorrow

🐥 Someone is bullish on Chimpers

🐥 New game studio to watch for

That's it for today folks, see you tomorrow. If you want more, follow us on Twitter (@the_metadata). And if you aren't already a subscriber, join us now to get all the daily alpha you need.

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Disclaimer: This newsletter is for educational purposes only. None of this is financial or investment advice. It is not a solicitation to buy or sell any assets. Please do your own research