- Deezy founder Danny exposes Magic Eden’s exploitation of Coinbase, raising X debates.
- Magic Eden redirects small transaction outputs to Coinbase, saving fees at Coinbase’s expense.
- Mempool founder Mononaut highlighted the last 24 blocks; Coinbase Prime processed 92,400 small inputs from Magic Eden.
Deezy founder Danny stated that Magic Eden, Bitcoin’s largest NFT marketplace, uses Coinbase to process modest transaction outputs. Magic Eden sends these little outputs, such as 1000-2000 sats, to their Coinbase account rather than their own address.
Also, he mentioned that the brilliant approach is that Magic Eden cleverly used a Coinbase account address rather than its address to receive these UTXOs (unspent transaction outputs), resulting in these modest contributions going directly into Magic Eden’s Coinbase account. Coinbase is liable for the integration fees. However, because of its vast size and sluggish reaction time, Coinbase was unaware of this and incurred considerable losses during the integration process.
Furthermore, Mempool creator Mononaut revealed that Coinbase Prime has merged 92,400 tiny transaction inputs from Magic Eden’s address during the last 24 blocks, spread across 308 transactions, at a cost of around 7 sats/vb. These transactions paid a total charge of roughly 0.59 BTC to recover around 1.75 BTC.
Coinbase’s State of Crypto Report found that traditional financial institutions’ payment applications make the system costly, difficult to use, and sluggish. Users must pay many times as their money is routed through intermediaries, incurring expenses and delays.
According to research, three out of five Americans want upgrades to make the system cheaper, quicker, and easier to use. The primary reasons for their interest in cryptocurrency are its simplicity of use, cost, and streamlined, digital, legacy-free nature.
According to Coinbase’s third State of Crypto Report, more than half of Americans aged 18 to 40 do not utilize traditional banking systems, and more than half of Fortune 100 organizations are pursuing blockchain efforts to remain competitive. The report aims to educate the public on the role of cryptocurrency in modernizing the financial system, emphasizing its potential to be cheaper, faster, and more straightforward for everyone to use since the existing system is too expensive, slow, and difficult to access.
