Dapper Labs Ruling Dunks on Private Networks

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Dapper Labs Ruling Dunks on Private Networks
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The case against Dapper Labs, the NFT giant that built a bespoke blockchain, could open up a can of worms for crypto platforms using native tokens and built on private networks, ArtSwap founder Paul Paray argues. Opinion.

, “The allegations that Dapper Labs created and maintains a private blockchain is fundamental to the Court’s conclusion.” .

In particular, Judge Marrero is concerned that Dapper Labs restricts the trading of Moments to the Flow blockchain, a network built by Dapper as a faster and cheaper alternative to Ethereum. While this raises questions about profits and transaction fees, the judge also argues that, on a technical level, “by privatizing the blockchain” Moments “purchasers must rely on Dapper Labs’s expertise and managerial efforts as well as its continued success and existence.

For example, unique items such as artwork more typically sold on an individual basis would not easily square with this ruling. It also raises potential concerns about NFT creators who partner with firms like Dapper to market and host their work. Judge Marrero actually addresses this issue when responding to Dapper’s motion to dismiss

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