NFT collector vaporizes $129,000 worth of CryptoPunk – a third of his net worth
With just a few clicks, a Web3 fortune can disappear in seconds.
On Friday, a non-fungible token collector permanently lost a CryptoPunk, a blue-chip NFT, while following a tutorial to prepare the collectible as loan collateral.
“I was so focused on following the instructions exactly,” Brandon Riley wrote on Twitter, “that I slipped up and destroyed a third of my net worth in a single transaction.”
Riley’s mistake illustrates how the often opaque and complex world of digital assets can lead to laypeople losing their nest eggs by typing the wrong address or misplacing a password. His problem is one that even early Bitcoin adopters have struggled with, most famously James Howells, who threw away a hard drive containing keys to a Bitcoin wallet containing around $200 million (at current prices).
In 2017, a two-person team created the CryptoPunks collection, which now has a market capitalization of more than $1 billion. (Yuga Labs, one of the premier NFT outfits and maker of Bored Ape Yacht Club NFTs, now owns the collection.) This was before the recent popularization of a now-standard protocol for issuing NFTs on Ethereum, the popular token blockchain , or create, non-fungible tokens.
In mid-March, Riley purchased Punk #685, one of 10,000 CryptoPunks in circulation, for approximately $129,000, according to Etherscan. Shortly after he bought the collectible – a pixelated man with a mohawk and sunglasses – he planned to “borrow some liquidity from it”.
Riley needed to “wrap” his CryptoPunk in what is now the standard protocol to post it on NFTfi.com, a decentralized lending marketplace, according to Decrypt.
Admittedly not a Web3 developer, Riley was following a tutorial on how to prepare his CryptoPunk for the lending platform when he accidentally sent it to the wrong digital wallet, which turned out to be a “burn address,” or a wallet where tokens like NFT- is can be sent but never withdrawn.
“This is truly a devastating mistake for me,” he said on Twitter. “But I did this myself, and it’s nobody’s fault but my own.”
Riley said he asked Yuga Labs, which declined to comment for this story, to provide him with an earlier version of CryptoPunk #685, but the Web3 firm has yet to come to the rescue. But another crypto enthusiast did, giving him a version of CryptoPunk #685 that now resides on Bitcoin’s blockchain.
“Hard to feel excited after burning a punk. Haha,” Riley later joked in a direct message on Twitter.
Still, he wrote, he hasn’t soured on the whole experience.
“I’ve been doing this for almost 2 years. Been on a rollercoaster the whole time, from 5 figures to 7 going through this bear market,” he shared Fortune. “No, it won’t change anything in terms of how I collect, just that I will be more careful and get help in the form of expert eyes when I try to do something that involves risk (as I have done in the past). “
This story was originally featured on Fortune.com
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