Major Setback for NFTs as $50 Million Platform Shuts Down Amid Turmoil

Recur, a once-prominent NFT platform valued at $333 million with backing from Ethereum co-founder and prominent investors, is closing due to challenges in the NFT market. Meanwhile, Mark Cuban criticizes OpenSea's decision to alter creator royalty fees, impacting NFT artists' income. Learn more about the dynamics affecting the NFT space.

Outlook International Desk

Updated on: 21 August 2023 4:40 pm

NFT

Recur, a prominent nonfungible token (NFT) platform, is ceasing operations despite a $50 million funding round and notable investors just two years after its highly-anticipated launch. The platform, which received backing from Ethereum co-founder Joe Lubin, the Winklevoss twins, and Gary Vaynerchuk, announced its decision on August 18. Recur cited the challenging business landscape and unforeseen challenges as reasons for its closure.

"Unforeseen challenges and shifts in the business landscape have made it increasingly difficult for us to continue providing the level of service and dedication that we have always strived to maintain," the company stated.

The NFT market has seen a significant decline in trading volumes throughout 2023.. As a result, Recur has decided to disable all transactions on primary and secondary markets by August 31. The remaining functionalities, including NFT withdrawals and cash outs in USD Coin (USDC), will be terminated by November 16. Users who wish to continue accessing their NFTs are advised to transfer them to a self-custodied wallet before the specified date.

Recur's trajectory had been promising, having secured $50 million in a Series A funding round in September 2021 during the peak of the NFT summer. The platform was valued at an impressive $333 million at that time.

In a separate development, U.S. billionaire and Shark Tank investor Mark Cuban has criticized NFT marketplace OpenSea over its decision to alter creator royalty fees. On August 17, OpenSea announced its plans to shift from enforcing creator royalty fees across platforms to implementing an "optional" model. Cuban, an OpenSea investor, labeled this decision a "HUGE mistake" in a post on August 18. He highlighted that the change will impact both OpenSea's reputation and the broader NFT industry.

Cuban argued that the shift to optional royalty fees will hinder the growth of future NFT applications beyond collectibles. OpenSea's CEO, Devin Finzer, explained that their on-chain royalty enforcement tool faced challenges as competitor platforms found ways to bypass it, affecting creator fees. This decision is raising concerns among the NFT community, especially NFT artists who rely on passive income from royalties.