Magic Eden, a leading cross-chain NFT marketplace, is undergoing a significant transformation set to redefine the landscape of decentralized finance. In a bold move, the startup has announced plans to open-source its minting and trading protocols in collaboration with the newly formed Non-Fungible DAO. This DAO, in turn, is gearing up to launch its own cryptocurrency token named “NFT,” designed to reward NFT traders engaging with the protocols.
Tiffany Huang, General Manager at Magic Eden, shed light on the collaboration, emphasizing that the Non-Fungible DAO intends to distribute the NFT token to users actively utilizing the governed protocols, which include the Magic Eden marketplace and minting protocols across various blockchains. While the specific blockchain for the NFT token launch is yet to be decided, Magic Eden, initially associated with Solana, continues to maintain a presence on the chain.
Users engaging with Magic Eden’s protocols are expected to receive the NFT token, although distribution details are still under consideration by the DAO. Simultaneously, Magic Eden plans to expand its existing Diamonds reward system across all four chains it serves, offering users an extended and enriched trading experience.
The Diamonds reward system, described by Huang as running on “parallel paths” with the DAO’s NFT token drop, will persist across different blockchains. Currently active on Solana, Diamonds will soon be part of an upcoming Ethereum NFT marketplace, slated to launch in late February in collaboration with the Bored Ape Yacht Club creator, Yuga Labs. The rewards will subsequently extend to Bitcoin and Polygon.
Magic Eden is also gearing up to integrate rewards into its new cross-chain crypto wallet, set to launch publicly on January 29, following a closed beta debut in November 2023. Unlike typical rewards models that focus on NFT traders providing liquidity or listing assets for sale, Magic Eden aims to reward retail users simply buying NFTs via the marketplace.
Huang outlined the Diamonds model, incorporating various quests to earn points, with a significant Diamonds drop scheduled for February 2, providing long-time users with rewards dating back to the marketplace’s inception in 2021. While there is overlap between NFT token rewards and Diamonds, Magic Eden treats them as distinct initiatives, each offering unique benefits to users.
The concept of decentralized foundations or organizations launching tokens for crypto apps or NFT projects is not new. It often serves as a strategy to navigate potential regulatory challenges. However, questions surrounding the authenticity of decentralization in such cases have arisen. Magic Eden’s collaboration with the Non-Fungible DAO appears to follow a similar pattern, with Magic Eden being the primary supporter associated with the DAO.
In response to queries about the notion of decentralization theater, Huang expressed Magic Eden’s long-standing desire to adopt a more open-source model. While acknowledging past criticisms for using closed-source code, Huang highlighted the company’s commitment to embracing the ethos of Web3. Magic Eden had previously announced plans to open-source its Solana protocols and has already launched open-source code for Bitcoin Ordinals. Similar steps are expected for Ethereum and Polygon in the coming months.
Magic Eden’s move towards open-source tech signifies a shift in its mentality and a commitment to a future where its technology can be utilized by other builders to launch marketplaces targeting specific markets or niches. As the NFT industry evolves, Magic Eden aims to contribute to its expansion and support a broader community of builders.
The strategic decisions, including the Non-Fungible DAO collaboration, the NFT token launch, and the expansion of the Diamonds rewards program, mark a pivotal moment for Magic Eden. The company is poised to embrace a new era of decentralized innovation, bringing a unique blend of open-source ethos and user-centric rewards to the rapidly evolving world of decentralized finance and NFTs.
