Written by: Glendon, Techub News
In this cryptocurrency winter, the NFT sector is undoubtedly a "disaster area." Trading volumes have plummeted, users have fled, and projects are withdrawing funds; the entire market development seems to have hit the rewind button. Following the announcements in January of the closures of NFT trading platform Nifty Gateway and NFT social platform Rodeo, another NFT platform plans to terminate some of its operations, attempting to seek transformation and survival during the winter.
Magic Eden, a once phenomenon-level multichain platform in the NFT market, is inevitably undergoing a life-or-death strategic contraction during this winter: shutting down its Bitcoin and Ethereum EVM markets and ceasing support for its multichain wallet.
Yesterday, according to Blockspace citing informed sources, Magic Eden is expected to close its Bitcoin and Ethereum EVM trading platforms in the first week of March, after which the multichain wallet will enter export mode only (allowing users to withdraw assets) in mid-March and will completely cease operations in early April. Related official announcements may be released as early as this Friday. However, it is noteworthy that the platform will still support Solana NFTs and assets.
This strategic adjustment means a significant change for the platform, as it will bid farewell to the multichain expansion strategy that it has been implementing for two years and will refocus its core resources on the Solana ecosystem and transformation development.
The Rise of Magic Eden: From Solana Unicorn to Multichain Dominator
Magic Eden was founded in September 2021 by former Coinbase product manager Zhuoxun Yin, former FTX employee Jack Lu, former Uber Eats founding engineer Sidney Zhang, and former Facebook engineer Zhuojie Zhou. The platform initially focused on NFT trading within the Solana ecosystem and quickly captured the Solana NFT market with a 0% listing fee and a 2% transaction fee strategy. On its first day of launch, the trading volume exceeded $50,000, and within a few months, it accounted for over 90% of NFT trading volume on the Solana platform.
The year 2022 was the breakout year for Magic Eden. In March, the platform completed a $27 million angel round of financing; in June, Magic Eden completed a $130 million Series B funding at a valuation of $1.6 billion, with investors including top institutions like Paradigm, Sequoia Capital, Greylock, and Electric Capital, officially becoming a "unicorn." During this phase, Magic Eden not only solidified its dominance in Solana but also launched the Launchpad platform, further enriching its business ecosystem.
With the emergence of the Bitcoin Ordinals protocol (a Bitcoin-specific NFT standard) in early 2023, Magic Eden began to rapidly implement its multichain expansion strategy. In March, it launched a Bitcoin NFT trading platform, capturing over half of the total Ordinals trading volume within a week. By 2024, the platform had expanded to support multiple blockchains including Ethereum, Polygon, and Bitcoin Runes, becoming a true cross-chain NFT hub.
According to Blockspace data, by mid-2024, Magic Eden had surpassed Blur and Opensea to become the NFT market with the highest monthly trading volume globally, recording a trading volume of $734 million in March 2024 alone. During this period, Magic Eden held an absolute dominant position in the Bitcoin Ordinals and Runes trading market, accounting for approximately 80% of the trading volume.
Additionally, a report released by CoinGecko in September 2024 further indicated that Magic Eden had become the top-ranked NFT market in 2024, reaching a market share of 36.7% by August with trading volumes remaining at the top for six consecutive months.
The development trajectory of Magic Eden reflects the golden age of the NFT market, while its current abandonment of multichain expansion in favor of focusing on the crypto entertainment sector reveals the structural crisis facing the current NFT industry.
The Transformation Journey of Magic Eden
In fact, Magic Eden has long been betting on the crypto entertainment sector and gradually undergoing transformation. For example, in its early development stage, Magic Eden launched branch projects like Eden Games aimed at combining NFTs with games and social experiences. In September 2023, Magic Eden launched the "Lucky Buy" feature, seen as the beginning of its transformation. This feature gamifies the NFT purchasing process, allowing users to win high-value NFTs through roulette with a small investment, shifting the platform from a traditional trading market to a focus on user experience and entertainment. In April of the previous year, Magic Eden acquired the decentralized trading platform Slingshot, initiating an attempt to transition from pure NFT trading to broader crypto asset services. In October of the previous year, Magic Eden launched the "Packs" feature, further enhancing its entertainment platform attributes.
However, Magic Eden's transformation faces multiple obstacles. On one hand, the shrinkage of the NFT market has led to a loss of fundamental users, with platform user activity significantly declining by 2025; on the other hand, the competition in the crypto entertainment space is intense, and Magic Eden's innovative initiatives have failed to establish effective competitive barriers.
A deeper issue lies in the sustainability of Magic Eden's original business model. Magic Eden relied on transaction fees for revenue, but with the dramatic decline in NFT trading volume, this income source has shrunk severely. According to nftpulse data, as of the time of writing, in the past year, Magic Eden's annual trading volume was approximately $503 million, while the annual market trading income was only $8.6 million. Although the company attempts to attract investors through staking rewards with the ME token (such as USDC stablecoin dividends), during the winter of a bear market, maintaining the token economic system is challenging.
Conclusion
User outflow, sharp declines in income, and other multiple factors forced Magic Eden to make a difficult choice in early 2026: to withdraw from the Bitcoin and Ethereum EVM markets, focusing on the Solana source chain, and betting on business areas such as token trading and entertainment products instead of NFTs. This decision is both an optimization of existing resources and a reluctant compromise to the industry's winter.
From a broader perspective, Magic Eden's predicament is not an isolated case but a microcosm of the entire NFT sector. Its strategic contraction seems to signal the end of an era, inadvertently validating the long-standing rumor that "NFTs are dead."
According to Cointelegraph data, the total market capitalization of the global NFT market has fallen below $1.5 billion, returning to levels seen before the industry’s explosion in 2021. By 2025, the number of circulating NFTs grew by 25% to nearly 1.3 billion, yet total sales dropped by 37% year-on-year to $5.6 billion, with the average selling price falling below $100. This series of data ruthlessly reveals the depressed state of the NFT market.
With the ongoing crypto bear market, the imbalance of supply and demand has made investors increasingly indifferent to the speculative hype of NFTs, as they tend to favor the "utility value" of crypto products. However, the current application scenarios for NFTs (such as game items or social identities) have yet to mature.
The narrative of Magic Eden's transformation compels us to ponder the ultimate fate of NFTs. Will they become speculative tools for "digital art," or value carriers integrated with the real economy? Will they rely on transaction fee earnings as a "short-term business," or evolve into a "long-term ecosystem" through token economies and practical applications? These questions remain unanswered, but one thing is certain: the future of the NFT industry will depend on the joint evolution of technology, scenario development, and user demand. Magic Eden's strategic contraction may be just a footnote in this lengthy process, while the real answer still needs to be collectively written by industry participants and users.
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