Magic Eden, a leading cross-chain NFT marketplace, made headlines with the launch of its native token, $ME, accompanied by an ambitious airdrop. But while the project created a buzz, the subsequent dramatic drop in token price has raised questions: Was staking $ME ultimately a smart move for the community?
The Launch and Initial Distribution
On December 10, 2024, Magic Eden introduced the $ME token with a total supply of 1 billion tokens. A significant portion—12.5% (125 million tokens)—was earmarked for a community airdrop. Users had until February 1, 2025, to claim their tokens, and according to Flipside data, more than 108.6 million tokens were claimed by over 185.4K wallets.
Despite this strong initial uptake, approximately 16.4 million tokens went unclaimed.
The Bonus Airdrop for Stakers
In a bid to reward active community members, Magic Eden redistributed the unclaimed tokens. The distribution was based on staking power, which took into account both the amount of $ME staked and the duration of staking. A snapshot was taken at the end of the claim period, and on February 14, 2025, the bonus airdrop was executed. Eligible stakers saw the tokens deposited directly into their wallets, with no extra steps required on their part.
How Were the Tokens Distributed?
According to Flipside data, here are the details:
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16.42 million $ME tokens were distributed among more than 44.5K eligible wallets.
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Most tokens were handed out in the first three hours after distribution began.
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62.7% of wallets received less than 50 tokens.
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28% of wallets received between 50 and 500 tokens.
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Over 90% of wallets received less than 500 tokens—which, at current prices, equates to under $880.
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A small fraction of users (26 wallets) received a whopping over 50,000 tokens.
Price Decline: A Major Concern
Even if one considers the closing price on December 10, 2024 as a benchmark, the $ME token has since plummeted by over 72%. This drastic decline means that many users who staked their tokens have seen significant erosion in value, raising the critical question:
Did the bonus airdrop provide enough compensation to offset the losses incurred by stakers?
Analyzing Profit and Loss Among Users
When weighing the bonus airdrop against the steep token price decline, the following insights emerge:
Users Who Profited
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Over 7,600 wallets realized profits of less than $10.
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A sizable group profited between $10 and $100.
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A third group saw gains between $100 and $500.
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In total, more than 86% of profitable users earned less than $500.
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Notably, 259 wallets enjoyed profits exceeding $10,000.
Users Who Incurred Losses
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The most common losses ranged from $10 to $100.
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7,320 wallets experienced losses between $100 and $500.
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3,922 wallets faced losses of less than $10.
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More than 77% of those who lost money saw a loss of under $500.
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However, 227 users suffered losses of over $10,000.
Overall, when accounting for the weighted average cost at the time of staking, about 54.2% of users ended up in a net loss position—their total asset value (staked amount plus bonus tokens valued at the airdrop price) now being less than the original value of their staked $ME.
So, Is Staking $ME a Good Strategy?
The answer is nuanced. For some users, especially those who received a substantial bonus relative to their staked amount, staking proved to be mildly profitable. However, for more than half of the stakers, the significant drop in the $ME token price meant that the bonus airdrop was not enough to counterbalance their losses.
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