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Tensions Erupt Between Magic Eden and Metaplex Over Future of Solana NFTs

source-logo  decrypt.co 09 December 2022 00:35, UTC

Solana has been ground zero for the ongoing industry debate over enforcing NFT creator royalties, and now long-simmering disputes between major players in the space have spilled out onto social media as builders try to shift the course of the Solana NFT space.

In a tweet thread on Thursday, Metaplex—the creator of Solana’s NFT standard—alleged that top Solana marketplace Magic Eden was leading a “coordinated pressure campaign” to try and take control of the standard. A standard sets the parameters and functionality of a token, in this case a non-fungible token (NFT) with features unique from other similar tokens. As the creator of the token standard for NFTs on Solana, Metaplex essentially wrote the code and holds the keys for virtually every NFT minted on the network.

Metaplex in its tweet thread today also mentioned Jordan Prince, who helped develop the original Metaplex protocol when he worked at Solana Labs, as a co-conspirator alongside Magic Eden. Prince went on to found B+J Studios, which raised $10 million in September to develop NFT infrastructure.

“Metaplex was built to elevate creators and artists above traditional gatekeepers, but those same commercial dynamics have re-emerged within Solana NFTs and are trying to pressure us into a half-baked governance scheme to take the standard out of the community’s hands,” the startup wrote.

2/ Metaplex was built to elevate creators and artists above traditional gatekeepers, but those same commercial dynamics have re-emerged within Solana NFTs and are trying to pressure us into a half-baked governance scheme to take the standard out of the community’s hands.

— Metaplex (@metaplex) December 8, 2022

In response to allegations that it holds a monopoly over NFTs on Solana, Metaplex said today that it will publish plans to decentralize control of its standard, and that it “[agrees] with the root need to decentralize the program.” However, the firm added that it won’t do so “haphazardly to appease a group that is acting in bad faith.”

Magic Eden then responded with a tweet thread of its own, writing that Metaplex had “falsely accused us of trying to take control over the NFT standard on SOL.”

2/ Currently, @metaplex owns the NFT standard the whole ecosystem is built on.

Their plan is to commercially govern the standard for their token holders. They have a god mode key that allows them to change how it works & plan to govern it for the benefit of their token holders.

— Magic Eden 🪄 (@MagicEden) December 8, 2022

The marketplace then alleged that Metaplex is trying to retain control of the standard for the benefit of holders of its MPLX governance token, which it launched in September. Magic Eden said that it and other Solana builders had given feedback to Metaplex regarding its plans, but suggested that Metaplex held undue influence over Solana’s NFT standard.

“[Metaplex has] a god mode key that allows them to change how it works,” Magic Eden tweeted about the standard functionality, “and plan to govern it for the benefit of their token holders.”

Ask yourself how it feels that they can fire a missile at you that freezes your NFT in place without you doing a thing. It may be for your own good, sure, but how does it feel? As the guy who designed that missile, it makes me feel like an asshole.

— jprince.sol (@redacted_j) December 8, 2022

This isn’t the first time that Magic Eden and Metaplex have been at odds over the direction of the Solana NFT ecosystem, but the dispute is spilling into the public like never before.

Back in August, a source close to Metaplex told Decrypt that Magic Eden’s approach to taking custody of users’ listed NFTs was a potential security risk, and that Magic Eden had rebuffed attempts by Metaplex to help open up its closed-source code. Magic Eden’s marketplace is based on early Metaplex code, but has been heavily modified and closed off.

Lately, Magic Eden and Metaplex appear to be taking diverging paths around the contentious issue of enforcing creator royalties on secondary market NFT sales. A creator royalty is a small fee, typically between 5% and 10% of the sale price, paid by the seller automatically to the original creator of the project through the marketplace in question.

Magic Eden Rivals Say NFTs on Solana’s Biggest Marketplace Are at Risk

Royalties cannot be fully enforced on-chain with the current standards on Solana and Ethereum alike, however. Magic Eden moved to make paying royalties optional for traders in October after a wave of rival marketplaces—which had already made similar moves—stole away a significant chunk of its market share.

Metaplex then announced plans to develop a new royalties-enforcing NFT asset class standard, MIP-1, which is due to roll out in January. However, Magic Eden announced its own protocol last week, which lets creators of new Solana NFT projects block those assets from being traded on marketplaces that don’t honor royalties.

Magic Eden CEO Jack Lu told Decrypt last week that it had shared its tool with Metaplex in advance of the announcement. However, in a Twitter Spaces today, Lu shared that he was frustrated over what he said were delays on Metaplex’s side to finish the MIP-1 standard.

“Magic Eden has been eating shit the whole time,” Lu said in the Spaces regarding its move to make royalties optional, suggesting that Metaplex had dragged its feet on a solution. “There’s no urgency here.”

On the Magic Eden-hosted Spaces, which Metaplex refused to participate in, Prince said that Magic Eden and other companies in the space had proposed a new decentralized governance model for Metaplex’s token metadata standard, which would see seven individual companies or projects on Solana each have three votes over the system.

Solana Soars, Flow Falls as NFT Market Declines Further in November

According to Prince, other proposed participants beyond Metaplex and Magic Eden would have included Solana wallet maker Phantom and analytics firm Hello Moon. Prince said that Metaplex dismissed the proposal, alleging that Magic Eden and its allies were colluding to steal away control of the Solana NFT standard. Metaplex’s tweets today line up with that view.

Lu added in the Spaces that Magic Eden intended to support Metaplex’s new asset standard, but that Metaplex needed to decentralize governance of its token metadata standard first.

I am pushing for us to use social consensus to bring royalties back, now.

Then we can calmly discuss the implications of the protocol solutions being presented to us.

It's too confusing to keep track of all the different solutions from ME, Cardinal, Metaplex, HyperSpace, etc.

— Frank (@frankdegods) December 8, 2022

All the while, Rohun “Frank” Vora—creator of DeGods and y00ts, two of Solana’s largest NFT projects—began pushing on Wednesday for Solana NFT marketplaces to opt back into enforcing royalties as a means of “social consensus.” Frank had previously removed royalty fees from his collections in October as marketplaces broadly pushed back against them.

Nearly two months after Magic Eden’s royalties shift, the Solana ecosystem is still wrestling with the aftermath and how to ultimately pursue a path forward that supports creators. But if the latest accusations between Metaplex and Magic Eden are any indication, it may be difficult to find consensus with two of its most vital participants so publicly at odds.