The Fact Behind the Alleged $56M CryptoPunk NFT Sale

CryptoPunk 1563 Transaction Raises Doubts

CryptoPunk 1563 was offered this afternoon for 24,000 ETH, or $56.three million, in what gave the impression to be a big transaction. Nonetheless, a number of seen and hid purple flags arose, elevating issues concerning the sale’s legality.

About $69,000 in ETH was paid in September for the acquisition of CryptoPunk 1563. This raises questions as it’s thought of a “flooring Punk,” which means it normally sells close to the entry-level value for the gathering. With no uncommon attributes, there’s no purpose to justify such an In depth evaluation of on-chain information signifies that the transaction was a element of a flash mortgage program. The acquisition was made utilizing flash loans, that are uncollateralized crypto loans that should be paid again in a single single transaction. The NFT purchaser borrowed $24,000 in ETH from the DeFi protocol Balancer and paid it again in a single transaction. Though the NFT did transfer between wallets, no precise cash modified palms as a result of the seller repaid the mortgage. Solely community charges have been paid by the client.

This isn’t the primary time such an software of flash loans has occurred. Somebody paid an astounding $532 million for a CryptoPunk in October 2021 utilizing flash loans, solely to return the cash in the identical transaction.  Whereas the occasion made headlines through the NFT market growth, the sale wasn’t acknowledged as reputable by CryptoPunks creator Larva Labs or different NFT information platforms.

Supply: CryptoPunk 

There’s an sudden twist on this case. In response to the on-chain investigator 0xQuit, this newest flash mortgage might be tied to an upcoming meme coin known as “Kamala Harris Punk.” The sale seems to be a stunt geared toward producing curiosity within the token’s pre-sale. The NFT in query is ready to be offered to the best bidder after a weeklong pre-sale part. The developer appears to be betting on incomes extra by means of the mixed NFT sale and token presale than the present flooring value of the Punk, which is round $63,400 value of ETH.

Whereas the purpose is to lift curiosity and capital by means of the presale, this technique may backfire. If the stunt fails to generate sufficient consideration or bidders, it would find yourself being a pricey gamble. The vendor is hoping to recoup the quantity raised within the presale by means of the ultimate public sale of the CryptoPunk, however there are not any ensures.

Excluding as we speak’s questionable sale, CryptoPunks have generated about $16.7 million in buying and selling quantity over the previous 30 days, in response to information from CryptoSlam. The very best reputable buy of a CryptoPunk occurred in February 2022, when one offered for practically $24 million value of ETH. That individual Punk was lately resold, although the precise quantity stays undisclosed.