No, a CryptoPunks NFT Didn’t Just Sell for $56 Million

Has a CryptoPunks NFT on Ethereum actually promoting for a report $56.3 million because the broader NFT market continues lengthy, sluggish decline? No. For this reason.

Though it’s true that CryptoPunk 1563 was accomplished this afternoonand that 24,000 ETH – value $56.3 million on the time – was ‘paid’ for the asset, there have been each superficial and behind-the-scenes pink flags that rapidly solid doubt on the legitimacy of the acquisition.

First off, this explicit CryptoPunk was final bought for roughly $69,000 value of ETH in September. It would not have any notably uncommon options, that means it sometimes sells close to the entry (or reserve) value for the gathering. It is a ‘ground punk’. There isn’t a apparent cause why it will improve in worth by 81,000% in a matter of weeks.

A take a look at knowledge in regards to the chain exhibits that the acquisition was made by the devious use of flash loans, often known as unsecured crypto loans that should be repaid in the identical transaction.

In a single transaction, the “purchaser” of the NFT took out a mortgage of 24,000 ETH from the DeFi protocol Balancer, after which the “vendor” paid the mortgage again to Balancer. Nobody truly made any cash, though whoever pulled the stunt paid community charges and Punk was certainly moved between wallets.

This is not the primary time this has occurred, and actually the $56.3 million value right here is not even near the “report” of any earlier payday loan-financed Punk buy.

In October 2021, somebody used payday loans purchase a CryptoPunk for $532 millionand likewise returns the cash in the identical transaction. Whereas the transfer made headlines and despatched shockwaves by the then booming NFT market, CryptoPunks maker Larva Labs stated it wouldn’t observe gross sales thought-about professional, and different NFT knowledge platforms adopted swimsuit.

Apparently there’s an fascinating twist on this case. In accordance with a pseudonymous on-chain detective 0xExitthe flash mortgage is seemingly tied to an upcoming meme coin referred to as “Kamala Harris Punk,” and the sale seems to be a stunt used to drum up curiosity within the token’s pre-sale.

0xQuit notes that the CryptoPunk in query will likely be offered to the best bidder after the week-long pre-sale part, and the developer is seemingly betting that they may make greater than the Punk’s precise worth – the present reserve value is roughly $63,400 value of ETH—by NFT gross sales and token presales. However there’s at all times a danger that the stunt will backfire.

“tl;dr 24,000 ETH is a psyop to promote what is basically a pre-sale, the place the punk will likely be offered after seven days to the best bidder with a minimal bid equal to the quantity raised within the pre-sale,” they defined out. “Possibly additionally a political assertion, given the identify and the clown make-up.”

Excluding at this time’s questionable commerce, CryptoPunks gross sales have generated roughly $16.7 million in buying and selling quantity over the previous 30 days, in response to CryptoSlam. The most important recognized (professional) buy of CryptoPunk befell in February 2022 just below $24 million worth of ETH. That was Punk just lately resold for an unknown quantity.