Exclusive Interview: Yuga Labs to Block Marketplaces That Don’t Enforce Royalties

On Monday, Feb. 26, Yuga Labs announced, in the lead-up to the Feb. 27 launch of Magic Eden’s long-awaited Ethereum marketplace, that it will sunset support for any marketplace that does not enforce royalties for all creators.

“Tomorrow, the much-anticipated Magic Eden Ethereum marketplace goes live—the first major marketplace to partner with creators and launch a platform that we can all be proud of—with custom pages for collectors, loyalty rewards, and contractual royalty enforcement,” Yuga said in a statement.

“Yuga and Magic Eden are taking a big step forward to bring us back to a creator-led web3. In sync with the marketplace launch, tomorrow, we will be sunsetting our support for marketplaces who don’t support royalties for ALL creators. This means that our collections with a royalty filter will only be traded on marketplaces that respect creator royalties for any and all creators at the protocol level. Royalties are the lifeline that keep creators building fun, weird, and innovative activations in the space,” they continued.

Louise Conroy, Yuga VP for communications, added an additional bit of news. “Our next PFP, The Grailed, from the 10KTF team, will also reveal on Magic Eden as Yuga’s first new and native collection on the marketplace. These PFPs were actually developed over many months by holders of NFTs across the 10KTF ecosystem,” she told nft now.

According to PPMan—the longtime Ape holder, active community member, and product manager at Yuga Labs spearheading the project—thie move to support royalty-enforcing marketplaces is for all of us.

He believes that when the space supports creators financially, they are free to bring back the spirit of fun and community that epitomized the space during the 2021 NFT bull market.

Yuga isn’t resting on its laurels following bombshell announcements of its acquisition of PROOF and Bored Apes founder Greg Solano retaking the CEO role. As Yuga prepares to welcome thousands of holders to Ape Island in the “Apes Come Home” Otherside trip, planned for Thursday, Feb. 26, nft now sat down with PPMan for an interview.

nft now: Why are Yuga Labs taking the step of blocking trading of their assets on marketplaces that don’t universally enforce royalties?

We’re blocking any marketplace that does not respect royalties for all creators. It’s not about Yuga—it’s about all creators.

If you go back to 2021, creators flocked to the space. They were all building really cool, weird, wild activations in all these platforms—and the monetization part of the creator equation was solved by royalties.

The royalties really solved that monetization part, but the creator had to focus on bringing attention to their project and uplifting their community.

I think that’s what made the space really fun. If you go back to 2021, the reason that everything felt so new, so cool, and so wild was because it was all about bringing attention to both the project and the community.

I think that this solves it—being able to come back to a space where royalties are enforced and creators can build without having to worry about that monetization aspect really brings back fun again.

What about peer-to-peer trading sites like SudoSwap or OTC trading—will that be blocked?

Philosophically, we’re going to allow our collections to be traded on any marketplace that respects royalties for ALL creators.

If you look at the example of SudoSwap, it has two protocols: v1, which doesn’t recover royalties, is going to be blocked. But it also has v2, which respects royalties for all traders.

It’s interesting that Yuga’s only allowing trading where everyone’s royalties are respected. With Yuga regularly enjoying some of the highest trading volumes across the market,  it could have chosen to support marketplaces that enforce Yuga royalties—but not necessarily those of other collections. Is this Yuga taking a stance for the space as a whole?

That’s exactly it. Back in 2021, when the space was fun, it was truly fun.

The analogy I like to use is that in the YouTube space, when Mr. Beast or Logan Paul put out content, they focus on bringing the most attention and the most fun for their viewers. They don’t focus on monetizing their viewers; they focus on bringing the most attention. They’ve solved the monetization aspect via ads.

Over here, creators should focus on the really wild, weird stuff that can make the space fun again, and the monetization aspect is solved via royalties—rather than creators having to find alternative ways of doing business that could potentially kill that fun.

Do you think that flippers and yield farmoooors will be annoyed that they can’t use Yuga assets to grind points as easily?

Magic Eden’s team is hungry to win. I really appreciate that team: they’re smart people, and they’re not afraid to reward both the creators and the collectors. That makes ME a very interesting marketplace for everyone to use, and there are rewards via the diamonds program—as well as rewards for creators via royalty enforcement that weren’t there before.

One of the most intriguing aspects of this stand for royalty enforcement is that it will take effect as Magic Eden’s new royalty-enforcing Ethereum marketplace goes live. Does Yuga have exciting plans for how the community will experience its collections on Magic Eden?

We have really cool things coming up for the “Yugaverse,” like collector pages: I have my Ape, and I also have my Mutants and my dog, that came from my Ape. And you’re able to see the whole hierarchy of which NFTs derive from my main Ape. There are cool custom collector pages in there.

And you’ll be able to earn normal Magic Eden diamonds by trading this stuff?

Correct!

Will PROOF assets like Moonbirds and collections like Meebits have cool features on their collection pages in this new marketplace? What about Punks?

I think that what Matt and John built with Punks and their marketplace stands on its own—it’s something very powerful they’ve built. I think it shouldn’t be touched.

On the PROOF side, it’s got some little things that I think collectors will like.

And Meebits, definitely—what I’ve mentioned about the “Yugaverse.” Being part of the Yugaverse, Meebits will see some cool things on the Magic Eden marketplace.

As a product manager with Yuga, have you got any alpha to share with our readers about what’s in store, particularly now that Garga has come back on board?

I’d love to give you alpha like that and share what we’re building, but I also think it kills a little bit of the excitement. What I can say is I’m very excited about [new Yuga subsidiary focused on Apes] BAYC LLC. I’m excited to see [Bored Apes creative director] Jeff Nicholas learn that aspect.

Another thing I can share is that there will be a little Magic Eden Easter egg in Apes Come Home [the next Otherside trip, slated to happen Thursday, Feb. 29].

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