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What is going on with Magiceden after the Balloonsville rug?

Last week, NFT holders in Balloonsville experienced a nightmare as the collection turned out to be a rug. In a tweet, the official account of Balloonsville, that is now run by Magiceden officials, unashamedly admitted that it was all a ruse. They obviously deleted their account after that.

Balloonsville’s account posted a series of tweets about how Magic Eden, a Solana marketplace, didn’t bother to check the team’s ID. Furthermore, the team stated that no proof of concept was provided and that they did not follow Solana’s procedures.

The Balloonsville?

The Balloonsville NFT series, was a successful drop of 5000-item NFT collection. Before the rug pull, the project allegedly made more than 17890 SOL ($2M). In the meantime, one NFT sold for roughly 1.88 SOL on average.

Now what?

Magic Eden has decided on a plan of action in reaction to the recent rug pull. They made the following Twitter announcements:

  1. Derugging of Balloons: Essentially, the choice was made after considering the number of Balloonsville followers. As a result, Magic Eden opted not only to derug the project, but also to contribute 5,000 SOL from their treasury to help support the roadmap. It’s important to note that the creators’ royalties will now be directed to a new location rather than the scammer.
  2. Refund minters who sold below the floor price: Around 85% of the first balloons were sold for more than the mint price. As a result, Magic Eden will only repay the remaining 15% of vendors who sold for less than the mint price.
  3. Present an option for a refund to holders: Finally, if holders choose to stray away, the marketplace offers the option of burning and receiving a refund for the mint price, which is 1 SOL. You may learn more by joining the Balloonsville 2.0 discord.

Aside from that, there would be no reimbursements for anyone who purchased the project on the secondary markets and then sold it at a loss. ” It is a slippery slope to refund trading losses, doing this will lead to market manipulation,” Magic Eden stated.

Community’s approach to the rugpull

The NFT community expressed its discontent with Magic Edens’ policies, given the fact that many current holders bought NFTs on the secondary market.

There’s no doubting that the rugpull harmed Magic Edens’ or Solana’s reputation. Many people are currently concerned about the verification procedure and accountability.

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