NFT marketplace Magic Eden sparked controversy on Friday after it decided to split its domains between the US and other global regions. This move has raised concerns among US users about how these changes will affect them.
Meanwhile, the NFT sector continues to struggle, with failure rates rising. A recent report found that 96% of NFT projects have failed, highlighting the challenges the industry faces.
The restructuring of the Magic Eden domain is causing concern
Solana-based NFT marketplace Magic Eden announced a domain restructuring in a recent post on X (formerly Twitter), outlining a separation between US and international users. Starting in September, US users will be able to access the platform via magiceden.us, while others will use magiceden.io.
The international domain will focus on new features, while the US site will continue to offer the current range of services. However, the core services remain consistent across both platforms.
“Today we’re announcing the new magiceden.io for international users, plus magiceden.us, for users in the United States. The US will still have great products you know and love, while .IO will give us the ability to cook (and sauté) even more features…” read the announcement.
Read more: 7 Best NFT Marketplaces You Need to Know About in 2024
Amid the changes, users, especially in the US, say Magic Eden’s domain restructuring is a step to avoid a possible Wells Notice. These concerns stem from the recent regulatory attack on New York-based NFT marketplace OpenSea.
At the end of August, the US Securities and Exchange Commission (SEC) published a Wells Notice against OpenSea. As BeInCrypto reported, the regulator has taken steps to classify NFTs as securities, with the market’s co-founder and CEO Devin Finzer pulling out.
Given OpenSea’s influence on the NFT market, tensions have arisen in the industry, prompting players like Magic Eden to restructure. Other users in the US are concerned about a possible crackdown on Magic Eden, hence the move to separate companies.
“Exactly, just tell us straight: why the smoke mirrors… if we have to have confidence in these exchanges, just say: US regulators are coming after us, we’ll bounce out, make your decisions accordingly,” one X user expressed.
Notably, the SEC continues to restrict services such as airdrops, commonly offered by NFT projects, in the US by classifying all digital assets as securities. This became clear in the case involving Texas-based Beba LLC and the DeFi Education Fund (DEF).
Meanwhile, amid regulatory issues, scams and other reasons, the NFT boom has been steadily dying down. BeInCrypto reported that 96% of NFT projects are considered dead.
Read more: 10 Best NFT Marketing Agencies to Promote Your Digital Art
Despite the backlash, Magic Eden remains a dominant force in the NFT market, on par with OpenSea. According to a recent report from CoinGecko, Magic Eden has 36.7% of the market share. In August alone, the platform recorded a monthly trading volume of $122.47 million.
Magic Eden Beats Blur NFT Marketplace Trading Volume, Source: CoinGecko
Data from DappRadar shows that after surpassing Blur in NFT trading volume by $108 million in May, Magic Eden is maintaining the streak, with more traders on its platform than Blur. Its success is largely attributed to Bitcoin Ordinals.