CryptoPunks Sale:In a move that made headlines on October 3, a CryptoPunk NFT was apparently sold for $56.3 million in Ethereum (ETH), but according to blockchain data experts, the move is simply a clever use of lending. fast rather than a legitimate sale.
Image credit: CryptoPunks
CryptoPunk 1563, which lacked any rare attributes and last sold for just $69,000 in September, appeared to skyrocket in value by a staggering 81,000 percent.
However, on-chain data reveals that the transaction was made using flash loans. The so-called “buyer” obtained an unsecured loan of 24,000 ETH from the decentralized finance (DeFi) protocol Balancer, only to repay it in the same transaction. Effectively, there was no exchange of funds and the purchase was simply a technical exercise. The buyer and seller only incurred network fees, and the NFT moved between wallets.
What are flash loans?
Flash loans are a type of unsecured loan available in decentralized finance (DeFi), primarily used on blockchain platforms such as Ethereum. Unlike traditional loans, flash loans must be requested and repaid in a single transaction or block on the blockchain.
Why are CryptoPunks so popular?
CryptoPunk NFTs have gained popularity for being one of the first NFTs, one of the first examples of digital art on the blockchain. Released in 2017 by Larva Labs, CryptoPunks is a collection of 10,000 unique pixelated characters, each with their own traits and rarity, making them highly desirable among collectors.
Image credit: CryptoPunks
Their limited supply, historical importance, and association with the rise of NFTs have made them a status symbol in the world. crypto community. High-profile sales and celebrity endorsements have further amplified their cultural value, solidifying CryptoPunks as iconic digital assets.
Previous instances
This is not the first time such a stunt has occurred. In October 2021, a CryptoPunk was purchased for an even more spectacular figure of $532 million, also through quick loans. These transactions are widely considered manipulative and are not counted as legitimate sales by NFT data platforms.
Kamala Harris Punk publicity stunt?
Some media reports suggest that the latest flash loan transaction appears to be linked to a marketing strategy for an upcoming cryptocurrency meme called “Kamala Harris Punk.” On-chain analyst 0xQuit reported that the NFT will be sold to the highest bidder after a seven-day pre-sale phase for the coin. The developer will get 10 percent of the token supply and funds from both the pre-sale and the sale of the Punk.
The hack appears to be aimed at generating enthusiasm for the meme currency, although its success remains uncertain. The current minimum price of a CryptoPunk stands at around $63,400 in ETH.
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