Fintech
Magic Eden redirects UTXOs to Coinbase
Deezy founder Danny revealed on X that Magic Eden, Bitcoin’s largest NFT marketplace, is leveraging Coinbase by processing small transaction outputs. Magic Eden routes these small outputs, like 1000-2000 sats, to their Coinbase account instead of their own address. As a result, Coinbase combines these results and covers the associated fees, unaware of the exploitation. Danny’s discovery exposes Magic Eden’s clever strategy to save on fees while Coinbase unknowingly incurs additional costs. This unexpected move sparked discussions on Twitter about the implications for large cryptocurrency exchanges.