Here’s why Magic Eden’s airdropped token flopped 67%

Magic Eden, one of the largest non-fungible token marketplaces, saw its newborn airdropped coin become a flop right after its launch on Tuesday, Dec. 10.

According to a blog post, the NFT marketplace, launched in September 2021, allocated 12.5% of its 1 billion Magic Eden (ME) total supply to its airdrop. The token generation event captured the attention of leading crypto exchanges.

Binance, Upbit and Bithumb announced to list ME hours before the launch. Coinbase also joined the listings late Tuesday, the exchange posted on X. 

The OKX crypto exchange also started supporting Magic Eden’s native token early Wednesday, per an official announcement. 

Right after its launch, ME reached an all-time high of $17, according to data from CoinGecko. This brought the value of the airdrop, 125 million ME, to a staggering $2.12 billion, making it the third-largest free token distribution event after Uniswap’s $6.4 billion and ApeCoin’s $3.5 billion airdrops, per CoinGecko data. 

Despite the notable exchange listings, Magic Eden faced a harsh selloff, a movement expected with token airdrops. ME plunged to an all-time low of $4.42 less than two hours after its launch and is still down by 67% from its $17 mark — currently trading at $5.71.

At this point, ME’s market cap is hovering at $745 million with a massive daily trading volume of $4.68 billion. The high level of trading volume suggests increasing demand for the asset.

Another phase of a selloff would still be expected for ME as the token distribution hasn’t been completed yet. Some X users also complained about the complexity of claiming the free Magic Eden tokens.

An X user with over 174,000 followers, known as Franklin, claimed that the Magic Eden wallet, used to collect the free tokens, faced technical issues. 

Many more complained about the same issue in Franklin’s X thread.