NFT marketplace Magic Eden is cutting 22 employees as part of its restructuring
Magic Eden, the largest non-fungible token marketplace for the Solana blockchain by market share, announced late Monday that it will lay off 22 employees, or about 15% of its workforce, as part of a “company-wide restructuring.”
Jack Lu, co-founder and CEO of Magic Eden, said in a letter posted online that the company was restructuring because the business had “grown significantly and our challenges have evolved” since the company’s launch 15 months ago.
“Our focus areas for 2023 include increasing cross-chain traction, developing services for NFT creators, and exploring new use cases such as rewards and social experiences,” Lu said. “When we established these priorities for the year, we had to look more closely at what structure and what roles are needed.”
Non-fungible tokens are a type of crypto-asset that represent the ownership of digital objects such as artwork, music or objects in video games. They are built on blockchains such as Ethereum and Solana, which are used to show the transaction history of the item’s ownership. An NFT can be bought, sold and traded on marketplaces such as Magic Eden, allowing NFT holders to exchange their ownership for cryptocurrencies that give them a monetary value.
Although the NFT market was extremely busy at the end of 2021, cryptocurrency values, and corresponding NFT markets, crashed during what was dubbed the “crypto winter” of 2022. According to a report from Reuters, the third quarter of 2022 saw $3.4 billion in NFT sales, down from $8.4 billion in the previous quarter. These figures had been a significant retreat from soaring sales the previous year. Although NFT sales volumes are recovering, this volatility has created problems throughout the industry.
Solana’s SOL token also experienced a significant market capitalization decline during 2022, falling from $93 in January 2022 to $23 in January 2023. This has affected the market capitalization of Solana-based NFTs, which are primarily bought and sold on Magic Eden’s market.
The marketplace does not exclusively trade in Solana NFTs, integrating both Ethereum and Polygon blockchain support in November to compete with larger NFT marketplaces such as OpenSea.
Despite the layoffs, Lu said the company “remains strongly capitalized with a long runway even in today’s bear market.”
“Many of our products are entering new stages of growth, and we will make it our highest priority to support these products with the strongest teams,” he added.
Magic Eden is not the only NFT marketplace to announce layoffs in recent months as crypto prices have fallen. Last month, NFT marketplace SuperRare laid off 30% of its staff, and Dapper Labs, the developer of CryptoKitties and NFT marketplace NBA Top Shot, cut 22% of its staff in November. OpenSea, the largest NFT marketplace by volume, cut 20% of its staff in July.
