Three Holders of Magic Eden's $ME File Class Action Lawsuit Over Compensation Changes
Three holders of the Magic Eden token $ME have filed a class action lawsuit against Magic Eden and its co-founders, citing issues with changes to the compensation system and governance. They claim that the compensation method has shifted from $ME to a focus on USD Coin (USDC). Ben Gruenbaum, a former contributor to the Magic Eden community data analysis, stated on the 10th that long-term locked users have been affected by changes in the ecosystem. He explained that out of a fixed supply of 1 billion $ME tokens, 225 million have been allocated for active user rewards over four years, with a maximum lock-up period of four years. Magic Eden ceased support for Bitcoin and EVM marketplaces on March 9 and ended wallet service support on April 1. The compensation structure has also changed, with 15% of total revenue allocated to the $ME ecosystem starting in February, which will be used for $ME buybacks and USDC rewards for stakers. The plaintiffs argue that the utility of $ME has diminished, and the lawsuit centers on consumer protection and false advertising issues. While Magic Eden is downsizing its product line and transitioning to new business ventures, further clarification on future products and the compensation system is needed.
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