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The ApeCoin decentralized autonomous organization (DAO) is set to launch its bespoke non-fungible token (NFT) marketplace for community NFTs today.
Cutting Fees And Improving Control
According to reports this week, the ApeCoin DAO is set to launch a white-label marketplace. The platform will support NFT collections such as Oherdeeds, Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club, and others from Yuga Labs.
The new marketplace has been heavily anticipated since it was first proposed in August. At the time, different NFT marketplaces had proposed building a bespoke platform for NFT collections from Yuga Labs.
The primary problem to solve was high transaction fees on the Ethereum blockchain, and with the Yuga Labs NFT collections being one of the most popular in the market, fees for buying and selling these NFTs can get exorbitant. With the high fees, there has been a propensity for scams and fake NFTs to thrive in the community.
As a solution, the ApeCoin DAO built a bespoke marketplace where they could better control activities. These marketplaces come with the benefit of lower transaction fees, royalty enforcement, and data tooling, which should help address the problem of scam NFTs.
Different NFT marketplaces pitched their products, proposing they be given the contract to build a bespoke platform for selling and buying Yaga Labs’ NFTs. Most prominent among these bands were Magic Eden and Rarible, which already offer white-label marketplace solutions for brands looking to enjoy greater control over the sales of their NFTs.
The bid was won by Snag Solutions, a startup that creates custom NFT marketplaces. Zach Heerwagen and Jason Jong co-founded the company, which launched in July and is currently closing its pre-seed round. Despite its relative novelty, it already has some pedigree in the market, as it created a marketplace for Truth Labs, the makers of the Goblin-town NFTs, in September.
Heerwagen claimed that Snag has worked with about ten companies, helping them create their white-label marketplaces.
Royalties As Creators’ Rights
The new NFT marketplace is expected to support only Yuga Labs-created NFTs. This means that collections purchased by the company, such as CryptoPunks and Meebits, will not be supported for the time being.
The marketplace’s support for NFT creator royalties is perhaps its most notable feature. Half of the seller fees for each NFT purchase are expected to be sent to the ApeCoin DAO community, which many believe will help incentivize creators to stay in the market. For listings obtained from non-royalty-enforcing marketplaces, the platform will automatically add royalty fees payable to creators.
The argument about royalties as a tool for empowering creators has raged on for a while. Earlier this month, OpenSea announced the launch of an on-chain tool to help enforce royalties, but only for new listings. The decision drew criticism from Yuga Labs’ co-founders, who claimed that NFT royalties should be enforced for all creators and collections.
There’s been a lot of discussion over the past few months about business models for NFT creators & whether creator fees (“royalties”) are viable.
Given our role in the ecosystem, we want to take a thoughtful, principled approach to this topic & to lead w/ solutions. 🧵
— OpenSea (@opensea) November 6, 2022
As the founders argued, NFTs are about giving back complete control of collections to creators. For that to truly happen, royalties need to be forced into every collection available. As a solution, they proposed a model that uses “allow lists,” which will be coded into an NFT’s smart contract. This list will permit trading between regular wallets but only via “marketplaces that respect royalties.”
While regular wallets would have their transfer requests allowed, transfers initiated by smart contracts would be checked against “an oracle of contracts that are known to respect royalties.” If a match is found, the request will be approved.