- Savvy investor score 98.3% discount on CryptoPunk NFT.
- A loophole in a fractional ownership scheme leads to a bargain.
- The incident highlights the risks and rewards of fractional NFTs.
A savvy investor managed to buy a rare Crypto Ape Punk NFT for a mere 10 ETH (around $23,000) – a whopping 98.3% discount from its estimated value of 600 ETH or $1.5 million. This unexpected bargain was achieved through a loophole in the fractionalized ownership scheme facilitated by the now-defunct platform Niftex. The incident highlights the potential risks and rewards of fractionalized NFTs and emphasizes the importance of understanding the underlying smart contract mechanics.
Punk 2386, with a current high bid of 600 eth, sold for 10 ETH today. A combination of clever sleuthing, followed by an unfortunate miscalculation leads to a 7 figure payday for 0x282.
Here’s the breakdown of the event. Ape Punk 2386, initially valued at around 600 ETH was fractionalized into 10,000 ERC-20 tokens in 2020. These tokens were then distributed among 257 holders via no inactive platform Niftex but its smart contracts remain active. These contracts allow any shareholder to initiate a “shotgun” buyout, offering a price for the entire Punk.
Ape Punk Buy Loophole Exposed
On August 28th, a user identified as 0x282 triggered a shotgun, proposing to buy the entire Punk for a measly 0.001 ETH per share (10 ETH total). While some shareholders noticed, only one (@gmoneyNFT) attempted to counter the offer. However, his miscalculation proved costly. To block the buyout, a counter-offer exceeding 0.001 ETH per share was required. gmoneyNFT mistakenly submitted a counterclaim significantly lower than the minimum threshold, leaving the door open for 0x282 to claim the Punk.
As a result, 0x282 easily walks away with a steal – a one-of-a-kind ape Punk for a fraction of its market value. This incident highlights the complexities of fractionalized NFT ownership and the importance of understanding smart contract mechanics. It also underscores the need for clear communication and collaboration among fractional NFT holders.
This story serves as a cautionary tale for the ever-evolving world of crypto and NFTs, showcasing the potential pitfalls alongside the opportunities. Hence, it’s crucial for investors to thoroughly research smart contract functionalities before participating in such schemes.
