Trader’s acquisition of $1.5M CryptoPunk for $23K raises eyebrows

A CryptoPunk worth millions was acquired for a fraction of its value through a smart contract, surprising onlookers who described what happened as either a “heist” or a brilliant play. 

CryptoPunks are some of the most expensive non-fungible tokens (NFTs) around. Because of their value, some decided to fractionalize these NFTs, splitting ownership of the piece. 

With smart contract mechanisms allowing fractionalization in place, a trader acquired a CryptoPunk with current bids of over 600 Ether (ETH), worth about $1.5 million, for only 10 ETH ($23,000). 

Rare Ape CryptoPunk sells for 10 ETH

Punk #2386, a rare Ape-themed CryptoPunk with a headband and small shades, was one of the NFTs fractionalized through a now-defunct platform called Niftex. According to the pseudonymous developer 0xQuit, the NFT was split into 10,000 parts with 257 owners in 2020. 

While the Niftex platform was decommissioned, the smart contracts continued to exist in the blockchain, allowing a trader to trigger a mechanism that allows a buyout. 

The developer explained that the setup allowed any shareholder to propose a “shotgun,” giving them a chance to purchase the piece after setting a price. If no one counters their bid, the asset will be transferred after 14 days.  

Because of this, a trader proposed a buyout for only 10 ETH on Aug. 28. The developer explained that pseudonymous NFT collector gmoneyNFT noticed and attempted to block the shotgun. However, the NFT trader could not set a proper counterbid, so the buyout proceeded. 

The NFT was acquired at only a fraction of its actual value. According to the CryptoPunks site, the NFT had bids of about 900 ETH (about $2 million) in January. On Sept. 6, CryptoPunk #6915, an Ape-themed Punk with a cap, an earring, and an eye patch, sold for $1.5 million. 

Related: Monthly NFT sales fall below $400M, marking yearly low

NFT community surprised with “steal of the century”

Community members expressed different opinions about the CryptoPunk play. One community member described the sale as “one of the biggest CryptoPunk heists of all time,” while 0xQuit called it the “steal of the century.” 

However, gmoneyNFT, who tried to block the sale with a counterbid, believes the trader played by the rules. 

Magazine: ‘Painful to think about’: NFT Creator Nate Alex on selling 70 CryptoPunks too early