The NFT ecosystem on Solana is facing a legal and reputational crisis as Metaplex, the leading protocol behind Solana’s NFT standard, prepares to sweep over 54,000 unclaimed SOL, worth approximately $7.3 million, into its DAO treasury.
Burwick Law, the New York-based firm, known for championing investor rights in the crypto space, argues that Metaplex’s plan is not only ethically questionable but also potentially illegal.
The controversy centers on “resize rent,” a small amount of SOL paid by users during NFT minting to fund on-chain storage.
Following a technical upgrade that allowed NFT metadata accounts to shrink in size, excess rent has remained dormant in these program accounts, unclaimed by users who were either unaware of the funds or never received adequate instructions on how to retrieve them.
Metaplex now plans to transfer these funds to its treasury, ostensibly for community use such as airdrops and grants.
Legal and Ethical Storm Brewing Over Unclaimed Rent
In an open letter addressed to Metaplex and the broader Solana developer community, Burwick Law warned that forcibly relocating user-funded rent into a DAO-controlled treasury could amount to unjust enrichment, conversion, or even violations of consumer protection laws.
The firm, which represents thousands of NFT investors, drew parallels between this case and traditional banking lawsuits in which undisclosed overdraft fees were later refunded to customers through class action settlements.
According to Burwick, this precedent suggests that NFT users may be entitled to restitution if Metaplex proceeds with its sweep without offering a refund mechanism.
Rather than invoking legal warfare, Burwick proposed a pause on the sweep and instead issue refunds directly to current NFT holders via a simple on-chain program upgrade.
The firm suggested a 90/10 split, where the vast majority of the rent is returned to users, and a small portion, approximately 10%, is retained by the DAO as a “network maintenance bounty.”
This solution, Burwick argued, would show that the Solana ecosystem is capable of self-regulating in line with Web3’s founding principles of transparency and fair dealing.
As of now, Metaplex has not publicly responded to Burwick Law’s concerns. The DAO has previously stated that reclaimed SOL would be used to benefit the broader community.
Legal Tensions and Industry Uncertainty Deepen Amid NFT Market Turbulence
The Metaplex drama is unfolding against a backdrop of increasing volatility in the NFT sector.
Just last month, Watch Skins Corporation filed a federal lawsuit against luxury conglomerate LVMH, accusing its watch brand TAG Heuer of infringing on patented NFT display technology.
Watch Skins claims its innovation enables smartwatches to display verified NFT art and alleges that TAG Heuer encouraged customers to infringe upon these patents.
Meanwhile, trading volumes in the NFT market have nosedived. February saw a 60% drop in NFT trading activity compared to earlier months, despite a brief resurgence in late 2024.
According to DappRadar and CryptoSlam, total NFT sales for 2024 reached $8.83 billion, just a fraction of the $23.7 billion peak seen in 2022.
Solana, which ranks third behind Ethereum and Bitcoin in total NFT sales, generated $1.4 billion, showing its growing yet fragile influence in the space.
The current uncertainty is further exacerbated by the fallout from Bybit’s security breach earlier this year.
The exchange, which lost nearly $1.5 billion to a North Korean cyberattack, recently announced the shutdown of its NFT and IDO platforms.
Though the company attributed the closures to a desire to streamline offerings, the timing suggests that ongoing security, legal, and trust issues are prompting major players to reevaluate their NFT strategies.
All these developments come at a turbulent period for the NFT market. For Metaplex, the next few days may prove decisive for the DAO’s immediate future.
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