NeoNexus, a popular non-fungible token (NFT) project on the Solana (SOL) blockchain, has announced it is winding up operations amid rumors of a rug pull.
A tweet published yesterday said the NeoNexus ecosystem “could no longer continue the healthy development” of the project. The tweet stated that the operations will be handed over to the community, or a “community-selected party for takeover if that’s feasible/possible.”
NeoNexus shot to stardom earlier this year as an NFT project that raised nearly $2 million in SOL at current prices. At the time, the 25,000 SOL that was raised had a value of around $4 million and looked to be one of the most promising projects on the Solana blockchain.
However, it appears things have fallen apart for NeoNexus with the founder Jack Shi citing a host of reasons for the dissolution. Shi announced via Discord that the decrease in “the activity, volume, and interest in the entirety of the Solana NFT space” was responsible for the difficulties faced by the project.
Shi said that in addition to low activity in the Solana NFT space, depleting funds struck a fatal blow for NeoNexus. He told the project’s followers on Discord that the team of 20-plus will have to be laid off and there are no foreseeable means of raising money for the project.
Daily NFT sales on Solana have fallen from 27,000 to 7,000 in the wake of the falling sales volumes of NFTs since last month.
NeoNexus may face class-action lawsuit
The ecosystem’s reaction to NeoNexus’ announcement has been animated, with many alleging a rug pull. The threat of legal action is already being discussed in some circles with a potential class-action lawsuit on the cards.
“So this project raised $4 million from multiple NFT drops and somehow ran out of funds after just a few months?” wrote a Twitter user named “zackxbt”.
He included a picture of Jack Shi in a hypercar with the Shi saying “this car is so comfortable and worth way more than my house.”
Rug pulls have been the bane of cryptocurrencies in recent times and have threatened the existence of the ecosystem. Last month, Baby Musk Coin lost 100% of its value after raising $2 million in an ICO,.
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