The immutable nature of the blockchain was put in stark relief on Wednesday when CryptoPunk #2386 , which is valued around 600 ETH (about $1.5 million), was acquired for a fraction of that price at 10 ETH (or just over $23,000)—after being locked up and overlooked thanks to a now-defunct website.
CryptoPunks are some of the most valuable Ethereum NFTs around, even years after the market boom. This particular Punk was especially prized, as out of the total collection of 10,000 profile pics, it was one of only 24 that depicted an ape—an animal beloved across the NFT space. One of these rare variants just sold for nearly $1.5 million last week, making it the last comparable sale.
Especially during the height of the NFT market, some CryptoPunks were so valuable that they were sometimes fractionalized—segmented, or sharded, into smaller shares—to allow many more investors to take partial ownership of one.
In the case of Punk #2386, its owner had fractionalized it through a short-lived website called Niftex. The NFT itself was locked in escrow on the Ethereum blockchain, and ownership rights were split into 10,000 ERC-20 tokens in 2020. Like other fractionalized NFTs, investors could buy and sell individual shards—but that became difficult to do after Niftex shuttered.
According to pseudonymous smart contract developer @0xquit on Twitter (aka X), Punk #2386 ultimately had 257 fractional holders. With the Niftex platform gone, however, the main way to trade fractional NFTs essentially left them in limbo.
Someone had their eye on Punk #2386, however, and because the smart contract remained valid on the blockchain, they were able to trigger a buyout feature and ultimately take ownership of the NFT for a fraction of its current value.
Punk 2386, with a current high bid of 600 eth, sold for 10 ETH today.
A combination of clever sleuthing, followed by an unfortunate miscalculation leads to a 7 figure payday for 0x282.
? pic.twitter.com/E29DLQZ0GT
— Quit (@0xQuit) September 11, 2024
“The setup is such that any shareholder can propose a ‘shotgun,’ whereby any shareholder can propose a buyout price, and if nobody counters, they can purchase the asset after 14 days,” @0XQuit wrote on Twitter, adding that the unknown person initiated the “shotgun” offer on August 28.
The bid was 0.001 ETH per share—or 10 ETH for all 10,000 shares. And the timer that almost no one could see started running.
One of the shareholders of Punk #2386, pseudonymous NFT investor and 9dcc founder Gmoney , said he attempted to block the purchase—again working directly with the smart contract—but failed because he miscalculated how much to counterbid.
I love the visual of this punk sale:
dude walks into a long abandoned, robot-operated art gallery.
he shouts into the air that he wants to buy one of its most valuable assets for 1% of its actual value. nobody hears his intent, except for the robots.
he waits 1 week.
the…
— tropoFarmer ? (@tropoFarmer) September 11, 2024
“I reached out to the two blockchain chads I know and trust the most for help with it,” Gmoney wrote. “I thought we had blocked it.”
Instead, the bid went through, and Punk #2386 was acquired—a move that oxQuit called “the steal of the century.”
“GG to the new owner,” Gmoney said.
The identity of Punk #2386’s holder is unknown, and as of writing, the now-famous NFT is not listed for sale. However, it has already received a bid from an interested buyer for 600 ETH. If he or she ultimately sells for that amount, it would be a 60x return on investment.
One viral tweet on the purchase framed the purchase as a "heist." Gmoney, however, said he did not see it that way.
“If you want decentralized systems, you have to take the good with the bad,” he said. “It’s part of the game. It’s why we’re here. If you don’t like those rules, you probably shouldn’t be playing.”