Disagreements between key market participants have been simmering for some time, but have recently exploded on social media as builders attempt to change the direction of the Solana NFT market. In the continuing debate over whether or not creators of NFTs should be compensated, Solana has been a prominent voice.
In a series of tweets posted on Thursday, Metaplex, the company responsible for the NFT standard, claimed that popular Solana exchange Magic Eden was attempting to exert “organized pressure” to gain control of the standard. An NFT is a token that has characteristics that set it apart from other tokens with similar characteristics. On Solana, NFT tokens fit the specifications set by Metaplex. Additionally, he has access to the keys for nearly all NFTs ever created on the system.
Today, in a discussion on Twitter, Metaplex accused Jordan Prince, a former Solana Labs employee who participated in developing the original Metaplex protocol, and Magic Eden, of being in on the plot. Prince later founded B+J Studios, which raised $10 million in September and constructed NFT’s backbone.
However, the startup claims that the same commercial forces have returned within Solana NFTs and are attempting to force it into a bad governance scheme to take control of the standard away from the community, despite Metaplex’s original intention to elevate creators and artists over traditional gatekeepers.
1/ gm Metaplex community. Over the past 24 hours, there has been a coordinated pressure campaign led by @MagicEden and @redacted_j to take control over the multi-sig for token metadata and give it to themselves and a small group of their close allies for personal gain.
— Metaplex (@metaplex) December 8, 2022
In response to accusations that it controls all NFTs on Solana, Metaplex announced today that it would release details on how it intends to distribute power over its standard and that it “agrees with the necessity to decentralize the program at its core.”
In a subsequent Twitter discussion, Magic Eden claimed that Metaplex “falsely accused us of trying to acquire control of the NFT standard on SOL.”
— Magic Eden
Earlier today, @metaplex falsely accused us of trying to take control over the NFT standard on SOL.
Many teams, including Solana Foundation, want @metaplex to decentralize governance of their token metadata standard so we can create a better ecosystem together.(@MagicEden) December 8, 2022
When Metaplex first began selling its MPLX governance token in September, the market assumed that the company was attempting to maintain standardization for the benefit of its token holders. Magic Eden indicated that Metaplex had too much control over Solana’s NFT standard, despite claims by Magic Eden and other Solana designers that they had provided comments on Metaplex’s designs.
With regards to the default features, Magic Eden tweeted, “[Metaplex] has a god mode key that enables them to modify how it functions, and they plan to run it for the advantage of their token holders.”
It's because they can rewrite the program, and gain access to privileges that outsiders cannot. They can prevaricate on what this means, but ask yourself how it feels to you that one company can do things that other companies cant when developing a royalties product.
— jprince.sol (@redacted_j) December 8, 2022
The ongoing dispute between Magic Eden and Metaplex over the future of the Solana NFT ecosystem is becoming increasingly well-known.
An individual familiar with Metaplex’s plans told Decrypt in August that Magic Eden’s method of keeping track of users’ listed NFTs posed a security concern, and that Magic Eden had declined Metaplex’s offers to assist in the open-source development of its closed-source technology. The original Magic Eden marketplace was created using Metaplex code, however, it has since been extensively modified and shut down.
The contentious subject of including creator royalties on secondary market purchases of NFTs appears to have recently split Magic Eden and Metaplex. An author’s share of the sale price is called a “creator royalty,” and it ranges from 5 to 10 percent depending on the marketplace.
However, the current state of Solana and Ethereum prevents complete on-chain enforcement of royalties. Because of the significant market share loss, it had sustained at the hands of other marketplaces that had previously implemented similar policies, Magic Eden decided in October to provide merchants the option of paying royalties.
Then in December, Metaplex said that come January, it will launch MIP-1, a new standard for a certain category of NFT assets that would guarantee the payment of royalties. This week, however, Magic Eden unveiled its own mechanism to let new Solana NFT companies prevent their assets from being exchanged on unlicensed markets.
Magic Eden CEO Jack Lu confirmed to Decrypt last week that his company had already provided Metaplex with its technology before the announcement. Today, however, on Twitter Spaces, Lu vented his frustration that Metaplex was moving too slowly to complete the MIP-1 standard.
About their decision to make royalties optional, Lu noted in the Spaces, “Magic Eden has been consuming garbage the whole time,” which implied that it had taken a while for Metaplex to come up with a solution. The situation is not urgent, thus “No.”
According to Prince, a new decentralized governance approach for Metaplex’s token metadata standard has been offered by Magic Eden and other firms in the industry. Within this framework, each of Solana’s seven businesses or initiatives would hold three votes. After much consideration, Metaplex opted against participating in Magic Eden’s Spaces.
Prince said that other companies than Metaplex and Magic Eden that deal with analytics and Solana wallets, respectively, might have been involved. According to Prince, Metaplex rejected the concept. There was a plot afoot, he claimed, with Magic Eden and its backers trying to replace the Solana NFT standard. Today’s tweets from Metaplex seem to back up this theory.
In the Spaces, Lu stated that for Magic Eden to adopt Metaplex’s new asset standard, Metaplex would need to make the information for its tokens distributed.
The Solana ecosystem is still debating how to best support creators nearly two months after a shift in Magic Eden’s royalty structure. It may be challenging to achieve an agreement when two of its most prominent actors are publicly at war with each other, as seen by the newest charges leveled against Metaplex and Magic Eden.
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