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Vault by CNN shutdown results in “back pull” accusations from NFT buyers

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on Monday afternoon, as stated by Parker MolloyCNN ended its major Web3 project by to announce“We’ve decided it’s time to say goodbye to the Vault by CNN.”

You may have already forgotten, but Vault by CNN launched in the summer of 2021 as a marketplace for its own NFTs (non-fungible tokens) that “would give collectors the opportunity to own a piece of history”. Kind of like NBA Top Shot, except media nerds instead of basketball nerds, it punched CNN reports of significant events or artistic interpretations inspired by them, creating digital collectibles for owners to somehow show off or trade with others. such as baseball cards. This idea seemed more reasonable, while cryptocurrency prices were skyrocketing, and the headlines about NFTs didn’t contain phrases like “trading volumes are down 97 percent since peaking in January.”

Things have clearly changed when the “crypto winter” kicked in, although an April report by the Press Gazette said CNN had raised more than $300,000 from the sale.

CNN vault lasted 16 times longer than CNN Plus

In a Discord channel for the service, another message informed owners that while the Vault website “will undergo changes”, it will remain available for them to view their collections and use the marketplace. Community response included shock, disappointment and a few posters saying they intended to contact their lawyers while accusing CNN of a “pull carpet’, which in crypto terms applies when a development team unexpectedly takes support — and money — away from a project, leaving the people who bought it with nothing.

In the Discord, CNN said it plans to compensate “the thousands of collectors who have joined this experiment” with distributions based on the purchase price of each wallet’s NFTs as committed on Oct. 6. In a separate statement from CNN, staffer “Jason” said: “The distribution will be either FLOW tokens or stablecoins that will be deposited into each collector’s wallet. We are currently working out the details, but expect the distribution amount to be about 20% of the total. original price new will be for each Vault NFT owned, he also noted that the actual media for the NFTs is stored in IPFS, a distributed file system that should mean they will remain available even if CNN’s website goes down.

So far, that doesn’t seem like enough to put collectors at ease, having expected tokens published by an established brand like CNN to get more support than many shady NFT projects. As a post in the channel put it, “you can’t just say goodbye, but your NFTs are still okay and now rarer…without a community (at least disagreement) and no utility…it’s not NFT anymore but just a digital copy…”

Discord posts from Vault by CNN collectors expressing disappointment at its sudden closure.
Image: Discord

Another member pointed out a problem resulting from the Vault relying on the Flow blockchain, the same Dapper Labs-created system that underlies NBA Top Shot and NFL All Day. Flow’s support documents state that withdrawals in the USDC stablecoin are allowed that is pegged to the value of the US dollar with a minimum of $10 per transaction with a processing fee of $4. The cheapest NFTs in the market from CNN are listed at $19 – if someone owns one, their discount would be about $ 4, or even less, leaving them with no return if they could withdraw it.

I spoke to a person who shared his wallet address and estimated that they had bought a whopping $11,000 worth of CNN tokens from his marketplace. Without continued support and after a 20 percent discount, they have little reason to believe that the value of the collection will remain near that level.

In addition, last month CNN still urged community members to purchase more tokens so that they would have enough to access events such as an upcoming Art of Voting NFT series scheduled for midterm election day, November 8. Collectors would need to own at least one NFT from a given set to get a key to access the Art of Voting set and other unspecified “exclusive benefits”. Documentation for Vault by CNN included a section describing the legendary “utility tool”. Exclusive CNN benefits and Exclusive CNN Vault merch are listed as “coming soon”. A roadmap with promised features even indicated that people could mint any CNN article as NFT later this year if they wanted to for some reason.

An Associated Press NFT marketplace launched in January is showing little activity and a broken Discord link.

No specific reason was given for the closure, but the Wall Street Journal wrote “NFT sales are flatlining” on May 3 of this year, and it hasn’t improved since. On the other hand, CNN’s Vault managed to last about 16 times as long as the CNN Plus streaming effort that launched in March and died exactly a month later.

According to the Vault marketplace website — which does not include a comment on the shutdown — the most recent transaction prior to the announcement occurred five days ago, on Oct. 5, when someone purchased a “CNN Defining Moments” token commemorating Nelson Mandela’s release from jail for $77.

The Discord post also informed holders of CNN’s plan to “burn” unsold NFTs, which it says will make them rarer, and thanked collectors for participating in the “experiment.” Until today’s announcement of the Vault’s closure, we couldn’t find any reference to the project as an “experiment” in CNN’s extensive tweets, Discord broadcasts, and press materials. In an email, CNN publicist Garrett Cowan tells: The edge that the six-week experiment mentioned in the post was an internal test leading up to its public launch in June 2021.

Vault by CNN logo

Vault by CNN logo
Image: CNN

CNN is just one of many notable brands and personalities that have launched NFTs in their so-called “bull run” in recent years, but have failed to live up to community expectations.

Athletes are a visible example, with NBA star De’Aaron Fox accused of pulling a carpet after his Swipathefox project raised $1.5 million and closed without delivering its promised benefits, or the Player’s Only NFT effort promoted by athletes like Michael Carter-Williams and Jerami Grant, who raised $1.4 million but struggled to deliver promised rewards.

League efforts aren’t doing much better: Prices and activity on NBA Top Shot have plummeted from their peaks, it’s unclear how NFL All Day is doing because I’ve never seen anyone talk about it, and while the NHL announced plans to launching an NFT marketplace in July, it hasn’t done it or shared details about the project since then. Just a few days ago, Lucky Trader reported that the UFC Strike NFT marketplace that also runs on Flow has paused packdrops and credited recent buyers with partial refunds after a user apparently exploited several recent drops to obtain rare items.

Elsewhere in the media, the Associated Press caused controversy by launching an NFT marketplace just as prices peaked in January with the stated intention of using the proceeds to fund journalistic efforts. utilities, the AP NFT Marketplace shows little to no activity on many recent drops, and a link on the page pointing to the project’s Discord doesn’t work.


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