Rally Leaves Social Token NFTs in Limbo After Abrupt Exit

Crypto VC Mike Dudas said Rally is “completely rugging owners of assets on the chain — not transferrable to Ethereum.”

article-image

Source: Shutterstock / art_of_sun / Praveen Nanu, modified by Blockworks

share

Social NFT platform Rally, roiled by a challenging year for the crypto industry, is shutting down and warned users that they may no longer be able to access their assets. 

The firm told customers in an email Tuesday that its Ethereum sidechain will sunset from Jan. 31 onwards. The site will no longer be supported and users will find the service no longer functions, it added.

CEO Rob Collier told Decrypt, which first reported the shut-down, that the move was due to lack of ongoing support, adding that maintaining the sidechain was too expensive compared to other recently launched layer-1 tech stacks.

Rally told its community that the team had been impacted by the concerns surrounding the crypto industry and it had tried to find a way forward, but the “challenges and macro headwinds are too overwhelming to overcome in the current environment.” 

“Additionally, since NFTs on the Rally side chain are not transferable to [Ethereum’s] main net, these will not be accessible once the site shuts down,” Rally said.

The platform launched in Aug. 2021, attracting users for not charging fees for exchange of NFTs.

“Feeless exchange of NFTs will allow more revenue to be captured by the creator, who will take home more of the value of their NFTs immediately upon sale, while also earning more over time through feeless, ongoing royalties and by increasing demand for their social tokens,” Rally said at the time. 

Crypto VC Mike Dudas said on Twitter that Rally is “completely rugging owners of assets on the chain — not transferrable to [E]thereum.”

Holders of NFTs on the bankrupt FTX similarly learned the hard lesson that a lack of permanent NFT storage on-chain can result in a loss of assets. In this case, Rally NFTs relied on the continuation of the Rally sidechain, rather than the immutable Ethereum mainnet.

Other projects that store NFTs on sidechains, such as Gnosis’ (formerly xDAI) POAP project allow users to migrate NFTs to Ethereum at any time.

Data from TradingView shows Rally’s native token RLY has dropped nearly 95% in the last 12 months.

It appears that Rally is still exploring whether it can build other products to empower creators, but it isn’t yet clear whether it has the resources to do so.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

tg trading bot report graphic.png

Research

Telegram trading bots have found their primary niche in highly speculative token launches and retail-dominated memecoin markets, with many features specifically tailored to token sniping and copy-trading strategies.

article-image

Ethereum is hoping that increased DA will grow user demand — and its profits through DA fees

article-image

11 years ago, Bitcoin contributors prevented a supply crisis… two centuries from now

article-image

Both samczsun and ZachXBT have issued warnings after the Bybit hack last month

article-image

The investor criticized Michael Saylor’s plan to render his personal bitcoin holdings inaccessible to anyone else forever

article-image

The exchange has structural defenses and protocols to limit manipulations

article-image

Upshift is being spun out of August, which raised $10 million earlier this month