Truth Labs, the creator of the viral Goblintown Ethereum NFT collection, has recently made surprise moves that have left some of its holders unhappy. The company changed all of the project’s artwork into animated GIFs of a middle finger holding up three additional middle fingers, with all 10,000 of the animated NFTs now reading “Fuck royalties. Fuck supporting building and creatives. Flipping is the heart of what makes Web3 special. Honor the flipper, fuck the community. Long live the slow rug.” This move has been interpreted as a sarcastic and facetious response to a broad shift among some traders who no longer honor full creator royalty amounts when selling NFTs, as well as the marketplaces that enable such behavior.
We are upgrading the contracts for all ERC-721’s in the Truth ecosystem. pic.twitter.com/WJufX5CNTh
— Truth Labs (@truth) April 11, 2023
In addition to the artwork change, Truth Labs announced that it had disabled any bidding, listing, or trading of Goblintown NFTs on OpenSea and Blur, as the company prepares to move its NFTs to a new smart contract that fully enforces creator royalty payments on-chain. Smart contracts hold the code that power autonomous decentralized apps (dapps), as well as NFT projects. Truth Labs said that it will automatically airdrop a new version of each affected NFT—with the original artwork—to holders’ wallets by the end of the day on Sunday.
The holder snapshot is taking place now and any buys, sells, or transfers that occur from now until the completion of the airdrop are high risk and…
— Truth Labs (@truth) April 13, 2023
The sudden artwork change and trading limits have not sat well with all holders, with some accusing the company of failing to provide “value” to Goblintown owners, as well as engaging in “centralized decision-making.” Despite the contentious nature of the royalties debate among NFT creators and collectors, Truth Labs wants to preserve creator royalties and continue to receive its chosen percentage of revenue from all secondary sales of its NFTs. This move is in line with the sentiment expressed by many other creators, projects, industry figures, and even NFT marketplaces who have echoed the need for enforcing creator royalties in recent months amid disruption in the NFT space.
Starting last summer, new marketplaces undercut the long-standing practice of honoring full creator royalty fees, grabbing away market share by luring away users with less expensive trades. As a result, more established marketplaces eventually followed suit as their once-dominant market share disappeared. Royalties can be a considerable revenue source for NFT creators, especially on once-trendy collections like Goblintown, which has seen over $101 million worth of trading volume to date per data from CryptoSlam.
“We as a team are committed to enforcing a royalty level that makes farming an unprofitable activity. All Truth collections will have 5% royalty going forward,” Truth Labs wrote on Tuesday. “Farming” is a reference to Blur’s NFT marketplace, which rewards traders for flipping NFTs, but is seen by some in the industry as a form of market manipulation. Despite the backlash, Truth Labs remains steadfast in its commitment to enforcing creator royalties and ensuring a fair distribution of profits.