Magic Eden NFT marketplace launched the ME token on December 10. As a part of the airdrop, the Magic Eden team distributed approximately $700 million in ME tokens to its large community.
However, many began selling the tokens immediately, causing the asset's price to drop by 50% in less than 24 hours after launch.
ME Token Price Drop
Prior to Airdrop, the crypto community actively discussed what price the ME token would trade upon launch. Many analysts predicted that Magic Eden's assets would debut at US$ 4.50. Ahead of the launch, the coin value on the whale market rose from $6.40 to $7.00. In the pre-market period, the ME exchange rate was $4.
Consequently, the launch of the Magic Eden crypto exceeded all expectations. Within minutes, the price of ME reached $17 and the capitalization soared to $1.6 billion. After 20 min, however, the figure fell and stabilized at $700 million by the end of the day.
The sharp correction was caused by the selling pressure from users who received ME in the giveaway and rushed to cash at the airdrop. Some were able to make significant contributions to airdrops. For example, one trader received USD 586,000.
App Issues Reported by Users
However, not everyone could take advantage of the situation because of the complicated process of obtaining tokens and system errors. To get ME tokens, users must have done the following:
- Download the Magic Eden Wallet application.
- Scan a QR code;
- Connect to a computer;
- Had at least $10 in ME equivalent in their wallets.
Many encountered technical errors and were unable to withdraw their coins quickly. The ME price dropped quickly, so users did not have time to sell tokens at the maximum price, which ranged from $15 to $20.
Users have reported problems with token withdrawal. Magic Eden was sending vague responses to users via the official X account, offering them to update their IOS as the only solution.
Despite these difficulties, some researchers have discovered new strategies to make money on airdrops. For example, one trader under the nickname nfttim in X earned $4,400 on commissions to provide liquidity on the platform.
Magic Eden’s Response
Magic Eden acknowledged the issues stemming from an unexpectedly high traffic volume on their mobile app during the launch period. The project’s representatives took responsibility for overseeing the token's rollout. However, the lack of help and clear communication with the community amidst the airdrop event has undermined the confidence of many users.
Users remain skeptical whether future updates will adequately resolve these persistent issues.
Expert Analysis and Opinions
Industry experts have shared their insights on the situation with Magic Eden tokens airdrop. Many observers have pointed out that, while excitement around new tokens typically generates significant trading activity and market attention, platforms should focus on user experience and security measures to maintain trust in their communities.
Critics have pointed out that deviating from best security practices could put users' assets at risk. For example, some experts have pointed out that storing sensitive data such as recovery phrases and private keys in an application without obvious deletion methods poses significant risks. As one expert noted, "Storing this information digitally is a bad decision,” emphasizing the need for users and developers to be careful when managing sensitive data.
Conclusion
Magic Eden news is one of a kind that is typical for the cryptocurrency market, but it is striking because of the scale of the airdrop. Magic Eden was caught in a perfect storm, apparently not calculating how much the sale would affect the token price, and not preparing for the increased traffic within the ecosystem.
Likely, the asset will slowly recover to its pre-airdrop value and the project team will be more cautious about giving away free tokens to promote the project.
As in cryptocurrencies, potential investors should approach such developments with caution. The volatility of new tokens, such as ME, reminds crypto enthusiasts and newbies that thorough research is essential before making investment decisions. While Magic Eden works to rectify app issues and restore user confidence, individuals should remain vigilant and informed about their investments in this dynamic space.
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