Magic Eden acquires crypto trading app Slingshot to compete with centralized exchanges
Quick Take Magic Eden just made its biggest move beyond NFTs — buying Slingshot to take on centralized exchanges. The NFT marketplace will now support trading across millions of tokens.
Magic Eden, the NFT marketplace that was valued at $1.6 billion in 2022, has made its first major acquisition by purchasing Slingshot Finance, a mobile-first onchain crypto trading app. The move signals Magic Eden's push beyond NFTs and into broader token trading, aiming to compete directly with centralized exchanges.
"The Slingshot acquisition is Magic Eden's big bet into the token trading space," Jack Lu, co-founder and CEO of Magic Eden, told The Block. "Slingshot's chain abstraction technology lets people trade millions of tokens on 10+ chains without needing to know how blockchains work (e.g. bridging, gas tokens, approvals). These chains include Solana, Ethereum, Bitcoin (coming soon) and many others. We believe this technology represents the future of all crypto trading and will allow Magic Eden to compete directly with centralized exchanges."
The acquisition comes at a time when the NFT sector is facing slumping trading volumes and waning attention. But Lu said Magic Eden remains "incredibly bullish" on NFTs, noting it generated $75 million in revenue last year.
"To us, NFTs are still in their early innings, and like any emerging technology, the path to mainstream adoption includes waves of experimentation and refinement," Lu said. "They are still a new digital primitive that will power the future of gaming, art, collectibles, etc."
Lu said the next phase of NFT adoption will be driven by usefulness, not hype. "What the market is really waiting for is a catalyst: a breakout app, a beloved brand, or a frictionless product experience that onboards the next million users," he said.
Still, Magic Eden is broadening its NFT focus to include token trading across the wider crypto market. While the platform already offers basic cross-chain token swaps, Slingshot adds extended trading functionality.
"Slingshot is a pureplay 'all chains' token trading app, it abstracts away the concept of chains, has much more powerful trading functionality and supports a much wider range of tokens," Lu said. With the integration, Magic Eden will now support trading in over 5 million tokens.
Magic Eden launched its own token last December. It is currently trading at around $0.82, up over 2% in the past 24 hours, according to The Block's ME price page.
Inside the Magic Eden–Slingshot deal
While terms of the deal were not disclosed, it appears to be sizable. Founded in 2020, Slingshot has nearly 1 million users and has raised $33 million in funding to date from backers including Coinbase Ventures, Ribbit Capital and Electric Capital.
"We raised $3 million in our seed round, $27.5 million in our Series A round (including an extension round), and $2.5 million in a recent insider round," Clinton Bembry, Slingshot's co-founder and CEO, told The Block. The total amount had not been previously reported.
Magic Eden, meanwhile, has raised $147 million in total funding to date from investors such as Paradigm, Sequoia Capital, Coinbase Ventures and Electric Capital.
Lu confirmed the acquisition has been fully completed, with no pending approvals, after discussions began with the Slingshot team late last year. "It's our first real acquisition. We did a small acquihire before, but nothing on this scale," he said, declining to provide details of the acquihire.
All members of the Slingshot team will be joining Magic Eden. Bembry declined to specify the exact size of the team, citing competitive reasons, but said it falls between 11 and 50 people. Magic Eden currently employs just over 150 full-time staff and has no immediate plans to expand significantly, Lu said.
Both companies worked directly on the deal, with legal support from Cooley and Cahill, according to Lu.
Notably, the Slingshot acquisition marks the second exit for Bembry, whose earlier crypto startup, Astro Wallet, was acquired by Coinbase in 2019.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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