MegaETH's $28M NFT sale bucks airdrop trend

MegaETH, an Ethereum (CRYPTO:ETH) Layer-2 project, is moving away from the traditional airdrop farming model by introducing "The Fluffle," a collection of soulbound non-fungible tokens (NFTs).

This NFT collection aims to grant network participants ownership stakes in the MegaETH project.

The Fluffle consists of 10,000 NFTs, each representing 5% of the MegaETH network.

These NFTs are soulbound, meaning they are non-transferable, ensuring that ownership remains with the initial holder.

This design aims to mitigate risks like Sybil attacks and Know Your Customer (KYC) challenges.

The NFT sale will occur in two phases, with the first phase targeting over 80,000 whitelisted addresses. Each NFT is priced at 1 Ether (ETH), which could potentially generate around $28 million.

MegaETH chose the soulbound NFT approach to bypass invasive KYC requirements, combat Sybil attacks, and implement strong Anti-Money Laundering (AML) measures.

The project also made it clear that no MegaETH team members will hold any NFTs, reinforcing the decentralisation ethos.

MegaETH has attracted attention due to its promise of achieving 100,000 transactions per second and the backing of Ethereum co-founders Vitalik Buterin and Joe Lubin.

The network’s public testnet is set to launch in early March.

The launch comes amid a downturn in the NFT market, as secondary NFT sales across blockchains have struggled to surpass $1 billion since April 2024, with unique buyers remaining below 1 million since May.

While many crypto projects have previously used airdrops to distribute network ownership, this model faces challenges like Sybil attacks and insider trading accusations, which often lead to user dissatisfaction.

MegaETH co-founder Bing Xiong explained that they couldn’t directly ICO the tokens to the community and opted for a lower valuation in the form of NFTs, leaving the purchase decision to individuals based on their valuation of the project.

Despite controversies, some figures in the industry, such as ABCDE Venture co-founder BMAN, have expressed support for MegaETH’s approach, viewing it as an attractive opportunity and a return to the retro ICO era.