TRUE LABS ACCUSED OF RUGGING GOBLINTOWN NFT HOLDERS OVER CREATOR ROYALTIES
Truth Labs, the creator of the infamous Goblintown Ethereum NFT collection that went viral last year, has been accused of « rugging » holders this week. The company reportedly changed all of the project’s artworks into animated GIFs of a middle finger holding up three additional fingers with the message, « 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. »
The recent move by Truth Labs comes amid an ongoing stand in favor of enforcing creator royalties, following recent changes by top marketplaces Blur and OpenSea to only enforce a minimum 0.5% creator royalty fee for many projects. A creator royalty is a fee attached to a secondary market sale of an NFT and typically ranges between 5% to 10% of the sale price.
The change in artwork and the trading limits, which has affected Goblintown and other NFT collections, including IlluminatiNFT, The 187, and Grumpls, has not been well received by many Goblintown holders who accuse the company of failing to provide « value » to Goblintown owners, as well as engaging in « centralized decision-making. »
As a response, Truth Labs announced on Thursday that it will disable 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.
While the royalties debate is contentious among NFT creators and collectors, Truth’s move to support royalties does not sit well with some Goblintown holders who believe that they have not been given the chance to make this decision. Some have called the trading halt « unacceptable, » adding, « Go back to Web2. »
The controversy over creator royalties has been ongoing in the NFT space since last summer when new marketplaces undercut the long-standing practice of honoring full creator royalty fees, luring away users with less expensive trades. As a result, established marketplaces 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. The project has seen over $101 million worth of trading volume to date per data from CryptoSlam, although the vast majority of that came shortly after the initially free NFT mint in May and June 2022.
Truth Labs, for its part, has described farming, a reference to Blur’s NFT marketplace that rewards traders for flipping NFTs, as a form of market manipulation. « 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.
Truth Labs has pledged 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. Bidding, listing, buying, and selling on Blur and OpenSea have been disabled for Goblintown, Secretsociety, The 187, Grumpls, and other Truth collections until the airdrop is complete.
