It’s no secret that NFTs, or collectible images that once fetched hundreds of thousands of dollars, aren’t buzzy. Monthly trading volume for non-fungible tokens has plummeted from a high of $6 billion in January 2022 to $429 million in March, according to data from CryptoSlam.
Some companies born in crypto’s NFT era have since sputtered out, but Magic Eden, an NFT marketplace, is still at it—while also branching out from what critics deride as tradeable JPEGs. On Wednesday, the startup, last valued at $1.6 billion in a 2022 fundraise, announced that it had acquired Slingshot, a trading platform that lets users buy and sell millions of cryptocurrencies.
In 2022, Slingshot notched a valuation of $84 million, according to data from Pitchbook. Jack Lu, the cofounder and CEO of Magic Eden, declined to disclose the terms of the acquisition but said Slingshot received a mix of equity and Magic Eden’s cryptocurrency: $ME. Negotiations played out from about January through April, he said. “I wouldn’t say it was love at first sight, but certainly, there was a lot of alignment very, very early on,” Lu added.
This isn’t Magic Eden’s first foray beyond NFTs. Launched in 2021, the NFT marketplace initially catered towards digital collectibles traded on the Solana blockchain. Magic Eden soon integrated support for non-fungible tokens issued on Ethereum, Polygon, and even Bitcoin, among a handful of other blockchains.
Then, as the NFT market nosedived, Magic Eden launched its own crypto wallet in January 2024, where users could not only store the NFTs they’ve collected but also hold cryptocurrencies they own. “This current strategy that we have is called one platform, all chains, all assets,” Lu said.
Users can already swap, or trade, tokens through the Magic Eden wallet, but it’s not a trading platform like U.S. crypto exchange Coinbase. Slingshot is more like an exchange, but it sits closer to the world of decentralized finance, or crypto protocols that allow users to trade without having to go through a centralized broker. Still, decentralized finance applications can often be clunky, as users often have to account for the complexities of trading assets across different blockchains.
Slingshot, said Lu, abstracts that complexity away for its users. Rather than force users to perform a series of leaps and bounds to transfer their cryptocurrencies from one location to another, the trading app does the calculations on the back end. “It just feels like trading on Coinbase, except it has the power of trading across every chain and every asset,” said Lu.
Magic Eden won’t absorb Slingshot into its existing teams but let the startup operate as is for now, Lu said. Its CEO, Clinton Bembry, will report to Lu’s cofounder and Magic Eden’s chief product officer, Zhuoxun Yin.
