CryptoPunk #685 Worth 77 ETH Burned by Collector Looking to Borrow Money Against It
An NFT collector’s mistake resulted in the accidental destruction of a valuable CryptoPunks NFT worth 77 ETH (worth $135,143), which has sent shockwaves through the crypto community.
Brandon Riley, an experienced investor and NFT collector, had purchased CryptoPunk #685 with borrowed money and intended to hold it for the long term.
Now feels like an appropriate time to introduce #BAYC 586 to #Punk 685 (acquired a week ago). Hope to hold both for a decade… LGF! 🚀 pic.twitter.com/SLb68rY6MR
— Brandon Riley (@vitalitygrowth) March 19, 2023
Riley had hoped to use the CryptoPunk NFT to borrow some money against it to buy another NFT, a popular technique known as wrapping. While going through the unfamiliar process of wrapping NFTs, he accidentally sent the asset to a burn address, which permanently deleted the NFT from circulation.
The incident has sparked discussions on the need to improve front-end processes for crypto ecosystems and the importance of caution when dealing with digital assets. While NFTs have been gaining popularity in the art and gaming industries, the irreversible nature of digital assets underscores the risks involved in the market.
Members of Crypto Twitter have expressed sympathy for Riley’s loss and called for better education and resources for investors navigating the complex world of cryptocurrencies and digital assets. The incident serves as a reminder of the importance of diligence and attention to detail when dealing with digital assets.
Riley himself has been candid about the incident and took to Twitter to share his experience with others. “I just shouldn’t have attempted this on my own, I guess,” he admitted. “I was not wrapping this punk to sell it on Blur. It was to be my ‘forever punk.’ The number is exact reverse of my ape. I was only wrapping it because I needed to borrow some liquidity from it.”
I did do the first part with my own address I’m step 2. But then when I got to step 5 the burn address was the one listed under “9. proxyInfo” and I was told to follow the directions exactly, so I did. I just shouldn’t have attempted this on my own I guess.
— Brandon Riley (@vitalitygrowth) March 24, 2023
Riley’s story has also reignited discussions around the potential risks of borrowing against NFTs, with some members of the crypto community warning against the practice. Despite the risks involved, borrowing against NFTs remains a popular strategy for some investors looking to leverage their holdings for short-term gains.
Ultimately, the incident serves as a cautionary tale for investors and collectors alike, highlighting the need for greater education and resources to help navigate the complex world of digital assets. As the popularity of NFTs continues to grow, it is essential that investors take the time to understand the risks involved and take precautions to protect their investments.
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