New Delhi : Social media was in the news on Friday morning when it emerged that a non-fungible token, or NFT, had been sold for over half a billion dollars ($532.41 million to be exact). A Twitter bot tracking Cryptopunks sales sent out a tweet at 5:22 am on Friday that punk #9998 was sold for 124,457.07 Ether (ETH) or $532.414 million.
Punk #9998, a white-haired, green-eyed pixelated character, is one of 10,000 collectible characters created on the Ethereum blockchain. Cryptopunks are among the most sought after NFTs in the world. First released in June 2017 as one of the first NTFs on the Ethereum blockchain, the Cryptopunks project is developed by American studio Larva Labs.
However, crypto-verse experts quickly pointed out that the sale may just be a publicity stunt.
According to Namish Shanghvi, CEO of cryptocurrency media outlet, Coin Crunch, since NFTs have moved back to the original wallet, the buyer and seller appear to be the same person or entity.
The identity of the person making these transactions was not immediately known.
To understand how the person was able to do this transaction, one has to know a concept called ‘flash loan’ in crypto.
“Flash loans mean that within a single block, one can raise as much money as they want, provided they borrow and repay the amount within the same transaction. There can be multiple transactions in a block, and since Ethereum It is a smart-contract based blockchain, an individual can do multiple transactions within a single transaction,” said Sanghvi.
There are DeFi (Decentralized Finance) projects that facilitate flash loans.
“So, in this example, the person borrowed over 124,000 ETH from various sources within a single flash loan, sold it to Cryptopunk and then bought the NFTs back to the original account and then paid off the loan. All in a single transaction- The giving was done within,” he said.
NS punk #9998 So, now with the same person who had it before.
However, experts say the person had to pay a transaction fee of around $800 to get around NFTs, and in the process drive up the price of the digital collectible.
Additionally, sales of punk #9998 The best seller at $532.41 million will not be counted in NFTs as the transaction took place in the same wallet.
The NFT space exploded earlier this year after digital artist Mike Winkelman aka Beeple sold NFTs for $69 million in March 2021.
Later Every day: first 5000 days by beeple, Cryptopunk #3100 And Cryptopunk #7804 The most expensive are NFTs, which were sold for $7.58 million and $7.57 million respectively.
With the latest sales, cryptopunk 8857 It has become the 4th most expensive NFT ever sold Crossroads by Beeple, which was sold for $6.6 million.
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