Behind the “leak” is a discontinued NFT fragmentation protocol

Written by Yangz, Techub News

In the early hours of this morning, CryptoPunk #2386, one of the 24 Ape Punks, was purchased by an address starting with 0x282 for 10 ETH. For a time, the NFT circle was full of "envy" and "doubt".

Indeed, even in the current NFT market, which is in a state of decline, the floor price of CryptoPunk is still around 30 ETH, and buying the extremely rare #2386 at one-third of the price is really shocking. You know, this Punk received a huge offer of 1,800 ETH in July 2022. After today's incident, some investors have already offered 600 ETH.

So, how did this person "pick up the leak"? 0xQuit  gave a detailed explanation.

According to 0xQuit's analysis, the key to today's events lies in two points. The first is 0x282's own strong "detection ability", and the second is the "calculation errors" of other investors. The first point is easy to understand, but what about the "calculation errors" of other investors?

In fact, as early as September 26, 2020, Punk #2386 was split into 10,000 ERC20 tokens by an NFT fragmentation protocol called Niftex, and was held by 257 investors before it was "picked up" today.

We know that in the NFT fragmentation protocol, in order to fully recover an NFT, investors generally need to collect all the "fragments". Niftex also set up another path called "Shotgun", which allows any fragment holder to propose a purchase price, and if no one objects, the NFT can be purchased in full after 14 days. 0x282's successful leak this time took advantage of this.

However, according to the transaction price of 10 ETH, the acquisition price proposed by 0x282 is only 0.001 ETH per fragment. With such a low price, did the other fragment holders of Punk #2386 not object?

In fact, the Niftex protocol has long ceased operations (the contract is still valid, and the body of this Punk is also hosted by the contract), so many fragment holders may not have noticed the "Shotgun" proposed by 0x282 on August 28. Even the two investors who noticed the "Shotgun" failed to prevent the acquisition for different reasons.

@0xQuit said that one of the fragment holders may have discovered the acquisition proposed by 0x282 very early, but did not take action in time due to the "14-day" time consideration. Although another holder @gmoneyNFT received a private message notification about the acquisition with 7 hours left and took action in time, he failed to really prevent the "Shotgun" from happening due to "calculation errors".

According to Niftex's settings, in order to prevent "Shotgun", fragment holders must purchase the "fragments" in the hands of the other party at a higher price than the bidder. The price proposed by 0x282 was 0.001 ETH per fragment, but @gmoneyNFT submitted 0.000001 ETH, which was lower than the requirement. In response to the incident, @gmoneyNFT said that it "tried to operate with an amount exceeding (0x282), but an error occurred during the contract execution." In the end, the "Shotgun" submitted by 0x282 passed smoothly.

In response to this incident, a large number of investors said that 0x282 was not a "leak", but a "robbery". In response, @0xQuit commented, "This is not a code defect or code vulnerability." And @gmoneyNFT also expressed his views. He said, "I don't think this is a robbery, it's an arbitrage using smart contracts. If you like decentralized systems, you have to accept its good and bad sides. This is part of the game. This is why we are here. If you don't like these rules, you probably shouldn't play this game."

As for who this 0x282 is, no one knows yet. The authenticity of @ezeegainz, who claims to be this lucky guy on X, is also unverifiable. But no matter who it is, this extreme "detection ability" and this "luck" have made the author envious. Finally, "gg to the new owner".