blockworks.co
Social NFT platform Rally, roiled by a challenging year for the crypto industry, is shutting down and warned users that they may no longer be able to access their assets.
The firm told customers in an email Tuesday that its Ethereum sidechain will sunset from Jan. 31 onwards. The site will no longer be supported and users will find the service no longer functions, it added.
CEO Rob Collier told Decrypt, which first reported the shut-down, that the move was due to lack of ongoing support, adding that maintaining the sidechain was too expensive compared to other recently launched layer-1 tech stacks.
Rally told its community that the team had been impacted by the concerns surrounding the crypto industry and it had tried to find a way forward, but the “challenges and macro headwinds are too overwhelming to overcome in the current environment.”
“Additionally, since NFTs on the Rally side chain are not transferable to [Ethereum’s] main net, these will not be accessible once the site shuts down,” Rally said.
The platform launched in Aug. 2021, attracting users for not charging fees for exchange of NFTs.
“Feeless exchange of NFTs will allow more revenue to be captured by the creator, who will take home more of the value of their NFTs immediately upon sale, while also earning more over time through feeless, ongoing royalties and by increasing demand for their social tokens,” Rally said at the time.
Crypto VC Mike Dudas said on Twitter that Rally is “completely rugging owners of assets on the chain — not transferrable to [E]thereum.”
Holders of NFTs on the bankrupt FTX similarly learned the hard lesson that a lack of permanent NFT storage on-chain can result in a loss of assets. In this case, Rally NFTs relied on the continuation of the Rally sidechain, rather than the immutable Ethereum mainnet.
Other projects that store NFTs on sidechains, such as Gnosis’ (formerly xDAI) POAP project allow users to migrate NFTs to Ethereum at any time.
Data from TradingView shows Rally’s native token RLY has dropped nearly 95% in the last 12 months.
It appears that Rally is still exploring whether it can build other products to empower creators, but it isn’t yet clear whether it has the resources to do so.
Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.
Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.