Key Points
- CryptoPunk #2386, valued at $1.5M, sold for just $23K.
- The rare NFT was locked due to the Niftex platform’s closure.
- Ownership was fractionalized into ERC-20 tokens, complicating the sale.
- A smart contract loophole triggered the unexpected CryptoPunk sale
In a shocking CryptoPunk sale, one of the most valuable NFTs on the Ethereum blockchain—CryptoPunk #2386—was sold for only $23,000, despite being valued at around $1.5 million.
This rare “ape” Punk, a part of the 10,000-piece CryptoPunk collection, is one of just 24 Punks with this specific trait.
Its low sale price was the result of a series of blockchain complications, smart contract mechanics, and the shutdown of a platform called Niftex.
CryptoPunks are highly sought after, often considered blue-chip NFTs. Recently, another rare ape CryptoPunk sold for nearly $1.5 million.
This makes the CryptoPunk sale of #2386 for just 10 ETH, or about $23,000, all the more surprising.
CryptoPunks NFT Worth $1.5 Million Just Sold for $23,000—Here’s Howhttps://t.co/gIZ6h2PuIT
— John Morgan (@johnmorganFL) September 12, 2024
How Niftex Shaped This CryptoPunk Sale
The unusual CryptoPunk sale stems from the NFT’s fractional ownership, a concept introduced to make valuable NFTs more accessible.
In 2020, the owner of CryptoPunk #2386 chose to fractionalize the NFT through Niftex, a now-defunct platform.
This process broke down the ownership into 10,000 ERC-20 tokens, allowing multiple investors to own a piece of the Punk.
However, when Niftex went offline, it left CryptoPunk #2386 locked in escrow. Investors could no longer easily trade their fractional shares, and the NFT was stuck, inaccessible on the Ethereum blockchain.
A Smart Contract Loophole Leads to an Unexpected CryptoPunk Sale
What followed was a dramatic twist in the CryptoPunk sale. Smart contracts, the automated blockchain agreements governing many NFT platforms, played a pivotal role.
The CryptoPunk remained in a smart contract initially set up by Niftex. When Niftex closed down, the Punk’s ownership became complicated, and investors holding fractional tokens couldn’t directly claim the NFT.
Amid this confusion, someone managed to exploit a loophole in the smart contract, allowing them to purchase the CryptoPunk for only 10 ETH.
As a result, CryptoPunk #2386, a valuable NFT, changed hands at a fraction of its true value, marking one of the most surprising CryptoPunk sales in recent memory.
This unexpected CryptoPunk sale serves as a cautionary tale about the risks of fractionalized NFTs and the reliance on third-party platforms.
With the shutdown of Niftex and the immutability of blockchain, this rare CryptoPunk was lost in a smart contract tangle.
While NFTs promise decentralized ownership, this incident highlights how complex and unpredictable the space can be.
