Decentraland Introduces a Royalties System for Their Blockchain-Based Virtual World Platform

The blockchain-based virtual world Decentraland has announced the implementation of a royalties system for items such as avatar wearables, a proposal originally suggested by their community (and passed by an overwhelming majority vote).

According to the official announcement on the Decentraland blog:

Up until now, when a wearable creator made a sale in the primary market, they received the listing price minus a commission of 2.5%, which went to the Decentraland DAO. However, when the sale occurred in the secondary market, the owner of the item (not necessarily the original creator!) received the sale price minus the 2.5% commission, which still went to the DAO.

With the implementation of Royalties in the Decentraland marketplace, only primary market commissions are destined to the DAO, while those in the secondary market now go straight to the creative hands behind the wearables.

Creators of new and existing collections on Polygon will be able to set a beneficiary address per item in the collection management tool, be it themselves or a third party. If a wearable is sold multiple times, it is now up to the creator to decide who benefits from all those sales!

The announcement notes that “royalties are not retroactive, so listings created before this launch will not be eligible to receive them.” I assume this means content creators and resellers will have take down old listings and put up new ones as a result.

Philip Rosedale has, in the past, mused about setting up some sort of royalties system for Second Life, but unfortunately it never came to pass. As far as I am aware, this is the first virtual world (blockchain or non-blockchain) to implement such a system.

Image taken from a previous version of the homepage on the Decentraland website
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