Once a dominant force in the NFT boom, Magic Eden is scaling back its NFT operations as the broader market continues to cool. The company will now focus exclusively on NFT packs — bundles of randomized NFTs similar to physical trading card packs — while trimming products that generate limited revenue. According to CEO Jack Lu, 80% of the platform’s costs were tied to products producing just 20% of its revenue.

The shift comes amid a broader downturn in the NFT sector. In early February, the total NFT marketplace market cap fell below $1.5 billion, dropping to levels not seen since before the 2021 boom. Major players like Nifty Gateway have already shut down operations, signaling a challenging period for the once red-hot industry as companies reposition for long-term sustainability.