Magic Eden traders can also earn a new NFT token in addition to ‘Diamonds’ rewards

On Tuesday, Magic Eden revealed more about how it plans to strengthen its existing business Diamonds rewards program about blockchains, while also discussing with Declutter the ways in which users can benefit from the launch of the NFT token.

Magic Eden General Manager Tiffany Huang shared Declutter that the Non-Fungible DAO will award the NFT token to people “using the protocols they control” – including the Magic Eden marketplace and cross-chain minting protocols.

Huang said it is not yet clear on which chain or chains Non-Fungible DAO will launch the NFT token, although Magic Eden itself started Solana and is still mainly associated with the chain. And while no specific details are available in terms of timing or token allocations, the connection between the NFT token drop and Magic Eden trading has been made explicit.

“What we can say objectively is that people who use Magic Eden’s protocols, the [NFT token],” Huang confirmed.

At the same time, Magic Eden will expand its existing Diamonds rewards system and transfer it to all four chains it serves. Huang described the Diamonds model and the DAO’s NFT token decline as “parallel paths” for trading rewards, and said Magic Eden’s own internal Diamonds surge will continue indefinitely.

“Magic Eden’s Diamonds program is something we want to live on forever,” Huang said, “even beyond the release of their NFT token by Non-Fungible DAO.”

Diamonds are currently live on Solana and will be part of the upcoming Ethereum NFT marketplace– created in collaboration with Yuga Labs, creator of the Bored Ape Yacht Club – which is now expected to launch in late February. Afterwards, Magic Eden will bring such rewards to Bitcoin and Polygon as well.

Magic Eden will also implement rewards in its new one multi-chain crypto walletwhich will launch to the public on January 29 after a closed beta debut last November.

Unlike some other points-based models that focus primarily on rewarding NFT traders who put their assets up for sale or providing liquidity to trading pools, Magic Eden also plans to offer rewards to the average retail user who simply purchases NFTs buy through the market.

The Diamonds model offers a series of quests that you must complete to earn points, she added. Magic Eden will also be handing out a huge amount of diamonds to long-time users on February 2, offering rewards dating back to the marketplace’s inception in 2021.

There is clearly overlap between the NFT token rewards and diamonds, but Magic Eden treats them as individual initiatives.

“You get diamonds the more you use Magic Eden, and you get NFT the more you use Magic Eden,” she explained. “But there is no direct correlation between diamonds and the token. They are two separate programs.”

Go open source

What is the non-fungible DAO? It is not entirely clear for the time being.

Huang described it as a community-owned organization with its own team separate from Magic Eden, and that the team has “historically launched several tokens.” Declutter asked to be connected to the Non-Fungible DAO team, but did not make contact before publishing this story.

We have seen examples in the past of decentralized foundations or organizations launching tokens used by crypto apps or protocols, as well as NFT projects. It’s seen as a way to avoid regulatory issues from the SEC and other agencies, although the approach tends to raise questions about whether it’s all a ruse, a bit of “decentralized theater,” if you will.

For example, ApeCoin is ostensibly the sign of the Bored Ape Yacht Club ecosystem, but Bored Ape creator Yuga Labs denies responsibility for creating it, despite embracing the token with its projects and receiving significant allocations. The official line is that ApeCoin was created by the ApeCoin DAO.

It could be much the same with Magic Eden and the Non-Fungible DAO, as the market is the only prominent supporter involved in the DAO so far.

Asked about the concept of decentralization theater and given the ApeCoin DAO example, Huang said Magic Eden has long wanted to embrace a more open-source model. Getting there wasn’t a straight path, though; Magical Eden does have that has been criticized in the past for using closed source code and resisting composability with other protocols.

“In my opinion, it was fair that there was that discussion and there was quite a bit of disappointment from the community about that at the time,” Huang admitted. “As we grew, it became very clear that we had to choose a path. And ultimately, we wanted to put the ethos of Web3 above all else.”

Magic Eden announced last year that it would eventually open source the smart contracts that power the Solana protocols, and was already launching open source code when it started supporting Bitcoin Ordinals. Huang said it will do the same on Ethereum and Polygon in the coming months, after a long period of reflection on Magic Eden’s role in the NFT world.

“I think – in the fog of war – we thought we had to go closed-source so we could just keep building and not be distracted,” she said of Magic Eden’s past mentality as it developed cross-chain started to expand. “I think we made mistakes in our attitude towards that.”

Now, however, Magic Eden is aiming for a future where its technology can be used by other builders to launch their own marketplaces that can target specific markets or niches, for example, and seek to expand the broader NFT industry.

But why now? Magic Eden’s Non-Fungible DAO launch and growing reward plans come as rival Tensor does acquired substantial NFT trading market share on Solana—as much as 70-80% lately. Tensor has its own reward model that hints at a potential token launch, which could drive growth.

However, Huang said it’s a matter of Magic Eden gradually developing to this point, through the launch of a cross-chain infrastructure and its associated wallet, plus what she had described as the company’s evolving attitude toward open -source technology. According to their team, the time has finally come.

“Think of it as two long years of playing chess,” Huang said. “We finally have all the right parts, and then we need to drive adoption of those parts. And we also want to show appreciation to the community that has stuck with us for so long.”

Edited by Guillermo Jimenez