Magic Eden Takes Steps To Prevent Future Rug Pulls And Here’s How

Magic Eden takes steps to prevent future rug pulls and bring higher-quality projects to its marketplace as it announced the relaunch of the white-glove minting and marketing service dubbed Launchpad so let’s read more in today’s crypto news.

The service allows NFT creators to drop their collections on the Solana marketplace but now teh company paused this service after two rug pulls scammed investors out of a thousand dollars. Now, Magic Eden takes steps to prevent these scams from happening by introducing stringent Know your customer requirements on rates and forcing them to dox the company privately.

🧵 We're excited to bring back Launchpad tmr. Did your heart just skip a beat with excitement + anxiety? Fret not.

Our trust & accountability blog post re: new Launchpad vetting criteria and what the community should expect from us as a web3 marketplace👇🏼https://t.co/LrSzTcREch pic.twitter.com/pokamLWDnv

— Magic Eden 🪄 Solana's Leading NFT Marketplace (@MagicEden_NFT) February 19, 2022

The rug pull is a type of exit scam where developers that remain anonymous leave the project all of a sudden and run off with the investors’ money. This type of scam is too common in the NFT space on Ethereum as the leading blockchain network for NFT trading and Solana. The premier marketplace on Solana was launched last year and racked up 411,425 users and more than $704 million in trading since the launch according to DappRadar. However, it had to think twice about the way it conducts businesses as a result of rug pulls on the Launchpad platform like King of Chess NFT.

This NFT was a collection that claimed to be a chess game but instead stole 645 SOL from investors. Similar ones did more damage and scammed more investors out of 5000 SOL worth almost $600,000 at the time. Magic Eden’s Tiffany Huang said:

“With both of these projects, we refunded minters [the buyers], because we felt like they didn’t even get a chance to finish the mint and are stuck in these positions.”

#Balloonsville just deleted their twitter.

Hey buddy, we traced ur account to @FTX_Official and are working with law enforcement to share your ID to police and ICE investigators.

We have a lot to improve at ME, but you're an asshole. The Solana ecosystem don't need u here.

— Jack Lu (@0xLeoInRio) February 6, 2022

One such example was also Balloonsville which trolled its investors and rug pulled them. The team said in a now-deleted tweet:

“All it took was a couple of paid actors, and boom. We did it again.”

Their account said that the actions were meant to prove a point and to expose a flaw in Magic Eden’s policies and claimed that it already instituted the doxing policy that required the team behind the NFT projects which used the Launchpad to ID themselves. Baloonsville declined to provide ID but Magic Eden allowed them to use the Launchpad either way. After the events, however, Magic Eden realized that it is moving too fast and saw the marketplace was suffering:

“We want to be better. Now we’re focusing on significantly fewer launches per week, with higher-quality projects.”

🎈 Ok, I found a solution to turn Balloonsville into Balloonsville 2.0 and make it better than it was supposed to be initially.

Officially announcing the DERUG of Balloonsville and start of @balloonsville_2 controlled by @TheMagicDAO

Goal: Original roadmap, BETTER! More 👇

— ChartFuMonkey (@ChartFuMonkey) February 6, 2022

Projects that use the Magic Eden Launchpad will have their funds in escrow for 24 hours and they also have the option to increase the period to 14 days.