Can centralized NFT services better protect users – for now?

Can centralized NFT services better protect users – for now?

Unfortunately, scams and bugs are still frequent in the NFT space.

? Solana’s most popular NFT marketplace Magic Eden paused its minting service two weeks ago after two notable rug pulls (scam type where founders run away after having drained the collected the funds): “King of Chess” and “Balloonsville”, which scammed out investors for $58k and $600k respectively.

Magic Eden has reopened its minting service since, and it now requires creators to complete a stringent KYC (that stays private to the marketplace), project verification and a 24h escrow period.

OpenSea, Ethereum-based NFT marketplace, has made many headlines recently. It is now facing a lawsuit from a former owner of a Bored Ape, which was sold for 0.01ETH ($26) due to a listings bug. The opportunistic buyer promptly sold it for 99ETH ($250k), but the market price may be way higher.

NFT projects and people’s interest in them develop so fast that the infrastructure tech does not always follow. It is surely possible to build a smoothly-functioning marketplace, ideally – decentralized, as well as a decent scam protection system – but it needs time.

Meanwhile, centralized marketplaces, despite being often criticized for their centralization, can use old methods to make things work, gathering experience and mistakes for others to learn from.

Due to their nature, they can also allow users to resort to traditional means – like the lawsuit OpenSea is facing.

We are still early.