Magic Eden Accused of Altering Rewards and Shutting Down Products After Locking $ME Tokens

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A former Magic Eden contributor accused the platform of changing rewards and plans after users locked $ME tokens. With a total supply of 1 billion, 225 million are allocated for user rewards, linearly unlocked over four years. Season 2 increased rewards to 10 million $ME, but budget cuts affected proposals such as Magic Lab’s request for 295,000 $ME. Users encountered issues during product shutdowns and a shift in rewards to USDC. Magic Eden’s actions have sparked debate among altcoins to watch and raised concerns across the Fear & Greed Index. Some top stakers are now suing over failed USDC payouts. Gruenbaum emphasized this is about ecosystem changes, not just token price.

Huo Xing Cai Jing reports that Ben Gruenbaum, former community data analysis contributor to Magic Eden and founder of Magic Lab, posted on X accusing the NFT marketplace Magic Eden of altering rewards, governance, product, and strategic direction after users locked up $ME for extended periods. He stated that $ME has a fixed supply of 1 billion tokens, with 225 million reserved for four-year active user rewards, linearly vested over four years with no early withdrawal allowed. After distributing 10 million $ME in Season 1, an additional 2.3 million were added due to issues; Season 2 rewards increased from 8 million to 10 million $ME. The community fund was launched with 5 million $ME. A proposal supported by Magic Lab requested 295,000 $ME (approximately $177,000 at $0.60), but budget constraints emerged as the price declined. Users continued locking up their tokens during periods when Bitcoin and EVM markets, Runes infrastructure, and wallets were offline, yet rewards shifted to USDC. Magic Eden pledged $75 million to Dicey, and some top stakers reported issues receiving USDC and have filed lawsuits. Gruenbaum emphasized this is not a story of token depreciation, but of changes to ecosystem components following users’ long-term commitments.

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