Was CNN's NFT Shop Just Ragpooled?

 

Photo: Anna Moneymaker (Getty Images)

Several CNN "Vault" NFT shop users abandoned the "R-word" on Monday with the news that CNN was closing its NFT store after almost a year of operation. Now the question arises: did a major news network simply rake up a rag pool, even if the firm has assured users on its Discord that it wants to reclaim some money for "thousands" of people for even more cryptocurrencies? Did you, too?

In a tweet published on Monday, CNN said, "Vault initially debuted as a 6-week experiment, but the support and interaction of our community has enabled us to grow the initiative into something more significant." Why don't we elaborate on that? Our maiden voyage into Web3 taught us a lot, and we can't wait to use some of Vault's ideas regarding collaborative storytelling in future endeavours. The network, of course, did not explain why it was shutting its locations. There's a point at which "NFT" may be considered offensive. From what we can see, NFT trade volume has dropped by 97% from its all-time peak last year.

Since CNN never stated an end date when it was first released, any claims that it has lasted longer than intended ring false. The original Vault press release advertised for future drops to feature "a wide variety of digital collectable themes and media," even though it only stated six weekly NFT releases for the first launch. At least the NFT platform has been around for a while, unlike the company's disastrous foray into the streaming service market with CNN+, which failed after just three weeks. The June 2021 release of Vault gave Flow blockchain users the ability to save a record of "defining events," such as a presidential election or a big space rocket launch.

Although the firm made efforts to allay customer concerns, some were worried that they would lose access to their NFTs if the service was discontinued. According to Jason, a purported CNN staffer, the NFTs of Vault are kept on IPFS, a decentralized file-sharing network. As Jason said, there won't be any more drops, and collectors will be compensated with Flow tokens or stablecoins. The kicker is that the user's Vault NFT wallet will lose around 20% of its value due to this "distribution."

CNN Vault and Disqus in a Screenshot

Even though the crypto bros were aware of CNN's intentions to reimburse Vault customers, the network's decision to end support was nonetheless met with disapproval.

Gizmodo reached out to CNN to inquire about the most common user complaints and the financial results of CNN's NFT auctions. There was a delay in response, but we'll update the piece if we learn more. Based on Decrypt's calculations, CNN likely generated hundreds of thousands of dollars in profit from its early NFT auctions that went unsold.

Users were quick to point out that the value of these NFTs would swiftly decline without an active community and no genuine use, even though the underlying market would remain operational. Other commenters pointed out the many flaws in CNN's reasoning for dropping the initiative. The Verge reports that Flow Blockchain imposes a $10 withdrawal cap per transaction and a $4 gas tax on stablecoins. Depending on what kind of NFTs a customer has in their wallet, withdrawing that stablecoin may not be enough to pay for the cost of withdrawing that cryptocurrency.

Users of Vault were not pleased to hear that their tokens might suddenly lose much of their value if the firm stopped directly supporting them. Others questioned CNN's justification for the 20% compensation it offered, given that its consumers showed no signs of stopping their spending even after many years of economic stagnation. Although some Vault users may have assumed that the Art of Voting NFT series will conclude on November 8, this is not the case. Users have reported that the corporation made similar promises around a month ago.

According to its current user base, CNN's profits are enormous; this suggests that the firm may be far larger than its reputation as a rag pool. New NFT initiatives are constantly being developed, although many of these organizations would like to not be associated with the term "non-fungible tokens." In the same vein as Reddit's "collectable avatars," based on the blockchain, Starbucks is releasing its own "digital collectible ticket."

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