PANews reported on December 11 that according to CoinDesk, the fully diluted valuation of the new token ME of the NFT trading platform Magic Eden reached $15 billion in the first few minutes of trading on Tuesday. However, as more and more claimants successfully processed their airdrops (in some lucky cases, even selling them), this valuation began to plummet significantly. Eventually, its fully diluted valuation stabilized at around $5 billion. Some observers believe that the ME token price only falling and not rising is a kind of punishment for the crypto project, as its airdrop handling process was very atypical, and according to three industry insiders, it may even have violated best security practices. Some users seem to have lost funds from their wallets in Magic Eden's complex process.
An unnamed industry insider said that the wallet issues that caused problems when ME was launched may also threaten user privacy. Traders need to import their wallet private keys into the Magic Eden app or create a new wallet and link the old wallet to claim the airdrop, but the latter may compromise privacy. The Magic Eden wallet app stores backups of users' recovery phrases and private keys, and lacks a clear deletion path, violating security standards. This process also makes airdrop claimants vulnerable to bad actors who may pretend to be Magic Eden. In addition, wallets created within the Magic Eden app cannot be easily transferred to other wallet apps, which is related to Magic Eden's reliance on technology settings different from other mainstream wallets. This can be overcome by importing the private key, which is hidden deeper in the Magic Eden app settings. Less tech-savvy users may attempt to transfer their Magic Eden wallet to another app using only a 12-word recovery phrase.
