A non-fungible token (NFT) from the CryptoPunks collection, worth around 600 ETH (nearly $1.5 million), was purchased for just over $23,000.
The NFT, CryptoPunk #2386, features an ape, one of only 24 in the 10,000-piece Ethereum-based collection.
This sale was the result of a now-defunct platform and a clever use of a blockchain smart contract.
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During the peak of the NFT craze, fractional ownership of expensive NFTs became common. Punk #2386 was no exception, as its owner split it into 10,000 ERC-20 tokens through Niftex in 2020, allowing 257 investors to hold shares in the asset, while the NFT itself was locked on Ethereum.
However, after Niftex ceased operations, trading these shares became difficult.
One savvy buyer realized that despite Niftex shutting down, the smart contract governing Punk #2386 was still functional. According to a developer, @0xquit on X, the new owner took advantage of the contract's buyout feature to claim the entire NFT for a fraction of its worth. Quit explained:
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.
On August 28, the buyer initiated this process, offering 0.001 ETH per share for all 10,000 shares, a total of 10 ETH. With almost no one aware of the bid, the clock started ticking.
Among the fractional shareholders was the NFT investor, Gmoney, who attempted to counter the offer but failed due to a miscalculation. He recounted the situation on X, admitting that although he sought assistance from two trusted blockchain experts, his efforts were ultimately unsuccessful.
The NFT has already received a new bid of 600 ETH. Should it be sold for that price, the new owner would see a 60x return on their investment.
In the end, the sale highlights the unpredictable nature of decentralized systems, where both remarkable gains and unexpected losses can occur.
In other news, the National Football League Players Association has recently sued DraftKings, alleging that the company failed to meet its financial commitments related to a now-discontinued NFT project.
