Yikes! Magic Eden Punishes NFT Buyers Who Don't Honor Royalties

GM

Welcome to the Weekly Rollup where we're mega pumped to launch our new newsletter design which is meant to provide you web3 news that's as easy to digest as chicken noodle soup. 🍲

Today, we cover:

• Magic Eden launches MetaShield, a tool 'enforcing' NFT royalties 🤯

• Doodle raises $54M on a $700M valuation and our take on whether or not VCs are good for web3. 📈

• MoMA selling $70M worth of art to purchase NFTs 🎨

• Our DAO of the Month (hint: it's a music DAO) 🎶

And more... Let's go 👇

🟣 TOP STORY

The NFT Royalty Debate Continues: Magic Eden Launches MetaShield

Magic Eden is the premier NFT marketplace for the Solana ecosystem and the 2nd biggest NFT marketplace in the space, behind Opensea. 

During the last few months, Magic Eden has experienced a meteoric rise by adopting Ethereum NFTs and taking stances nobody else dares to take… Their latest stance – launching MetaShield.

MetaShield is an NFT royalty enforcement tool that allows creators to track the addresses that don’t honor royalties. The NFTs in the possession of these addresses can be flagged and blurred by the creator, who has the ability to alter the metadata of the NFT. 

As a background, recently, we all woke up to the fact that NFT royalties are not enforceable on-chain when SudoSwap launched a 0 royalty NFT marketplace and gobbled up 10% of the market in a short period. Buyers and sellers (especially flippers) were attracted by the potential to increase profit.

This goes against the whole ethos of web3 which is to put more money back in the hands of the original creator. This is especially true for artists who often don't realize much value from their art since most sales occur on secondary markets.

MetaShield is Magic Eden’s solution. In their thread, they explain how this is a tool exclusive for creators who can flag NFTs bought without paying royalties. Note that it is always the seller who pays the royalties, not the buyer. However, the buyer is warned not to buy the NFT that doesn't honor royalties. If the buyer goes ahead and buys it, they get 'punished'.

This tool is also intended to help creators filter out the members of their community by differentiating those who honor royalties from those that don’t. This would enable creators to direct future benefits to their true fans (future airdrops or perks).

MetaShield is just another tool in a creator’s web3 toolbox. We're not sure it's the right tool though. One of the clear issues is that with so many aggregator marketplaces like Gem growing in popularity there's a good chance that the buyer doesn't know where they purchased the NFT from and if it they paid royalties or not.

So while we do believe that NFT royalties are a good thing and should be honored we're not convinced this bold move by Magic Eden is the way to do it.

The NFT debate is far from over with so many questions to be considered...

• Are NFTs really immutable and decentralized if the metadata can be changed at any time?

• We should care about small artists getting their fair share through royalties but If Nike launches an NFT collection, should we really care about royalties being honored? We would just help them make billions of dollars.

There are a lot of arguments from both sides of the coin and there’s no right or wrong. But it sure would be easier if royalties were enforceable on-chain… Devs, do something! 

👉 Read our article if you want to find out the truth about NFT royalties!

🟣 TOP STORY

Doodles Raises $54M on a $700M Valuation Raising an Obvious Question: Are VC's Good for Web3?

Doodles’ ultimate goal is to become the Disney of web3, aka a billion dollar media and entertainment empire. In order to achieve this Doodles' needs to grow their team (reportedly from 20 employees to 50) and in order to do that they need more money.

Apparently $54M more.

For context, this money has been injected into the parent company of Doodles, not into the NFT collection itself. This means that the investors in this funding round didn’t buy any Doodles NFTs. And that made the community angry…

Not to mention Doodles' didn't post on twitter for over 2 months. Not even a GM. So ya the community was a bit upset. As a Doodles NFT holder, you got nothing out of this fundraiser because no NFTs were bought.

Now, it’s understandable that the NFT holders are pissed, but they have to keep a long-term perspective. In order for Doodles to become the next Disney, they need to raise capital. If they succeed, the Doodles NFTs will also grow in value. Similar to how the original Mickey Mouse artwork is now worth hundreds of thousands.

However, to be fair, VCs should be required to buy at least 1 NFT from the collection, if they’re investing in the project, don't you think?

🟣 TOP STORY

MoMA Is Selling $70M in Art (Picasso's) to Buy NFT Art

The Wall Street Journal reports that MoMA (Museum of Modern Art), one of the biggest art galleries in the world, is selling $70M worth of art, including Picasso’s, to extend its digital reach.

If you’re wondering what MoMA is, here are some numbers you should know:

• 1.65M visitors last year, down from 3M pre-pandemic

• Digital reach of 35M on social media & their website up from 30M pre-pandemic

• Holds trillions of dollars in art

Think about this… There was probably a meeting in one of the world’s biggest art galleries and someone said ‘we should sell our Picasso’s and buy digital art (aka NFTs)’ and people agreed.

This is huge! And when they’re going to put the CryptoPunks or Autoglyphs on the walls of the MoMA, it’s going to get enormous media attention. Btw, note that this news story was covered by the Wall Street Journal. That’s big in itself.

🟣 DAO OF THE MONTH

Decentralized Web3 Music Label: omgkirbyDAO

Our DAO of the month is omgkirby DAO, a decentralized music label and community pushing the boundaries of generative music and art.

Launched in 2020 by the anonymous artist(s), omgkirby, this DAO is one of the best examples we've seen of building a thriving community. 

Essentially, behind this DAO, there’s an NFT collection called omgkirby Genesis. This is a collection of 3000 unique generative songs produced through generative software. The artist inserts different sounds into a software, which creates different song variations. 

Now, each holder of these songs are part of the DAO, which co-produces songs together. Each member contributes with sounds and tones and the software spits out the song. 

The amazing thing about this is that omgkirby has 1.7M monthly listeners on Spotify, making it the first generative music & art NFT with full intellectual property rights and 1M+ monthly listeners on Spotify.

In the first week of June, omgkirby had the top two music NFT collections in the world, based on secondary sales according to OpenSea.

In total, omgkirby has already generated more than 293 ETH (119 ETH has gone to the DAO, while the rest was split amongst omgkirby’s creator, the team, and online sales platform Notables).

🟣 NUMBERS TO KNOW

$700,000,000

That’s how much Doodles, the company, is worth.

$35,000,000 

That’s how much Messari raised to become the Bloomberg of crypto.

292

That’s how many followers Kyle needs to reach 10k on Twitter. Help a fren out and give him a follow.

🟣 AROUND WEB3

Updates about Opensea, Messari and Tim Ferris NFT

• Opensea will soon support Arbitrum NFTs. Source

• Opensea has redesigned their website to be more UX friendly. Source

• Messari raises $35M to expand ‘Bloomberg of crypto’ ambitions. Source

• Tim Ferris is launching an NFT collection called TimTimNifties. Source

🟣 FOR THE DOERS

READ

Find out the truth about NFT royalties by reading our deep dive on the matter.

LISTEN

Check out omgkirby on Spotify.

LEARN

Take our FREE Web3 Rabbit Hole Course to get up-to-speed on the foundational components of Web3 so you can confidently build, work, or use the fastest growing technology in history.