Problems at ParaSpace cause ripples in NFT market; BAYC and MAYC affected
- ParaSpace governance began to see conflicts due to the CEO’s behavior.
- Yuga Lab NFTs saw a decline in interest. Milady is starting to gain market share.
Decentralized lending protocol ParaSpace has witnessed some conflicts within the management in recent days. ParaSpace allows users to borrow and lend against NFT tokens.
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A scoop of the deal
A group of over twelve employees, including the Chief Operating Officer (COO) of ParaSpace, took the reins of the organization’s official Twitter account.
They sought to counter the CEO’s actions and removed his authority from the protocol. The group made allegations against the CEO for having an unchallenged grip on the project’s finances and failing to provide relevant financial information.
After gaining access to the official Twitter account, the team stated that they had no plans for malicious behavior.
Dear ParaSpace Community,
TL;DR: There have been no malicious actions by the team. All funds are safe from Yubo, the protocol is under the full control of the team, and we have the financial means to ensure the stability of the platform.
Today we are sharing information… pic.twitter.com/58M3U1uLwv
— ParaSpace (@ParaSpace_NFT) 10 May 2023
They also issued a statement to the community regarding the recovery of funds from a hack that took place on March 18, 2023.
The team discovered that user funds were not fully returned to the protocol, and over 1 million USD equivalent amounts have flowed out to various unknown wallets and CEXs.
The protocol was under the exclusive control and management of Yubo Ruan, CEO/CTO, whom the team has since removed due to his failure to comply with their requests.
The team secured the protocol’s multi-sig. This meant that Yubo cannot access user funds and assets. They are committed to dealing with this situation quickly and effectively to reinforce the strength and resilience of the ParaSpace community.
Impact on BAYC and MAYC
Because of these conflicts, large amounts of withdrawals occurred. On May 10, withdrawals on the platform exceeded approximately $35 million. The withdrawals included 138 BAKC, 591 MAYC, 278 Otherdeed, 264 BAYC, 72 Meebits and other assets.
Most of these NFTs were part of the Yuga Labs cohort.
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These events had an effect on these blue chip NFTs at press time. NFTGO’s data indicated that Bored Ape Yacht Club (BAYC) floor prices fell significantly over the past month.
Source: NFTGO
In addition, another popular gathering known as the Mutant Ape Yacht Club (MAYC) observed a decline in the number of holders. The number of whales holding this collection has dropped significantly in recent months.
Source: NFTGO
Also, as R&D around these NFT collections increases, new NFTs such as Milady continues to take large amounts of market share.
