Magic Eden Announces Plans to Incentivize Users With New NFT Token and “Diamonds” Rewards

Magic Eden Partners With Non-Fungible DAO

There is a massive shift coming for NFT marketplace Magic Eden. On Tuesday, the crypto company announced that it was partnering with a new decentralized autonomous organization called Non-Fungible DAO to open-source its trading and minting protocols. Per the announcement, the DAO will launch a digital currency dubbed “NFT” to reward Magic Eden users.

Speaking to news platform Decrypt on Tuesday evening, Magic Eden boss Tiffany Huang revealed the company’s plans to extend its Diamonds rewards programs to various blockchains while explaining how users could benefit when the NFT token launches.

Huang said the Non-Fungible DAO is looking to reward people with its token for simply using the blockchain protocols they govern, which includes Magic Eden’s NFT minting protocols and marketplace. When asked which blockchain the NFT token would run on, Huang said she hadn’t been informed yet. Some NFT traders on X are already anticipating that the crypto asset will launch on Solana, given that Magic Eden is one of the leading marketplaces on that blockchain.

Magic Eden Set to Expand “Diamonds” Rewards to Four Blockchains

Further, Huang said Magic Eden’s Diamonds reward system will soon be available in all four blockchains in which the marketplace has a presence. At the moment, the reward system is only live on the Solana network. It will be available on Magic Eden’s Ethereum-based NFT marketplace when the platform launches next month. Magic Eden partnered with NFT creator Yuga Labs to develop the marketplace. The Diamonds reward system will later go live on Polygon and Bitcoin.

It is worth mentioning that Magic Eden will reward users of its multi-chain cryptocurrency wallet with some “Diamonds.” The wallet was released in beta version last November but is set to be available for public use at the end of this month.

According to Huang, unlike many NFT marketplaces that only reward users who provide liquidity or list NFTs for sale, Magic Eden intends to reward an average user for simply trading NFTs on the marketplace.

The company’s boss said there will be free distribution of Diamonds to longtime Magic Eden users at the start of February. Those who started trading on the platform when it launched in 2021 will receive more diamonds.

Going Open-Source

So, what is a Non-Fungible DAO? Huang describes it as an organization that is community-owned. She says the DAO’s operations will be overseen by a separate team other than Magic Eden’s. Tiffany reveals that the team behind the DAO has launched a good number of successful tokens in the past.

Over the years, several decentralized autonomous organizations have launched tokens, which crypto protocols use up to date. It is perceived as a means of trying to avoid any regulatory problems with the US Securities and Exchange Commission, which has accused numerous blockchain projects of offering unregistered securities to the public.

For example, Apecoin DAO launched the ApeCoin token, which Bored Ape Yacht Club uses as its native token. However, Bored Apes creator Yuga Labs has been denying accusations of launching the digital currency via the Apecoin DAO. That’s despite embracing ApeCoin and being one of the largest holders.

Some NFT enthusiasts believe a similar scenario is happening with Non-Fungible DAO and Magic Eden.

When a journalist from Decrypt gave Huang the Apecoin DAO-Yuga Labs example, she said the goal of Magic Eden has always been to embrace an open-source model. Therefore, their partnership with Non-Fungible DAO has made that possible.

Magic Eden Criticized for Its Closed-Source Model

Crypto fanatics have long criticized the NFT marketplace for embracing the closed-source model, which is against Web3 ethos. Following the criticism, Magic Eden said last year that it will soon open-source its smart contracts.

Magic Eden’s latest announcement comes at a time when the marketplace is facing stiff competition from its main rival, Tensor. As of this writing, Tensor is processing the most NFT trades on the Solana blockchain and witnessing the most new users, according to data from Tiexo.io.