Why Did Crypto Punk Sell For $530M?

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On 28th October, the NFT community was surprised when a CryptoPunk NFT was sold worth $530 million. Technically, this could’ve been the biggest sale ever in art history.

In truth, it could have just been merely a brilliant marketing gimmick, given that the current owner acquired the NFT for themselves. Here is how it happened:

https://twitter.com/CNET/status/1453920396684713989?s=20

CryptoPunk Sold For $530 million… Or Did It?

Around midnight UTC on a Thursday. Something was noticed by one of the Tweet bots that were reporting CryptoPunks selling in real-time. Payment again for CryptoPunk #9998 NFT with an ETH value of 124,457.07 was completed. The message that accompanied the sale simply stated, “Appears to be rare.”

The NFT, on the other hand, was hardly uncommon. The extraterrestrial punk who managed to sell for 4,200 ETH earlier in March possessed much more uncommon characteristics! The shocking transaction was quickly analyzed by crypto experts, who were able to solve the mystery within minutes.

https://twitter.com/cryptopunksbot/status/1453872415591829504

The Main Reason Behind The Sale

Surprisingly, the $530 million CryptoPunk auction was nothing but a smart contract transaction executed for strategic reasons.

It seems that the anonymous bidder acquired the NFT from the seller, according to the transaction information on Etherscan. A flash loan, in essence, was created by the collector using a wallet as collateral. A flash mortgage is a decentralized financial technology that is used to loan significant sums of cryptocurrency to individuals using smart contracts.

The buyer used a second wallet to acquire his own NFT, which was then transferred back to the original wallet after the transaction was completed. Finally, the buyer was able to repay the flash credit, which had been secured from a variety of sources.

Mariano Conti, an angel investor, gave all of the information (in a reduced form) in a tweet:

https://twitter.com/nanexcool/status/1453874296812670976?s=20

What is the most likely scenario for the transaction to take place? This is mostly due to the fact that a single individual may hold numerous digital wallets. A consequence of this was that the CryptoPunk purchaser was able to move the CryptoPunk from one account to another even though he had ownership of both wallets.

Now, to address the major point raised by this news: why would anyone do such a thing?

The majority of on-chain experts and collectors feel that the shift was a well-executed marketing gimmick to gain attention. Others, on the other hand, contend that the purchase was just done for sake of the play, with no particular objective in mind.

The scenario is even more bizarre when you realize that the customer did pay 0.19 ETH (approximately $800) to complete the deal.

In February, a HashMask NFT was supposedly “sold” for 139,000 ETH, and a similar situation to this one occurred. Similar to the punk, the NFT was purchased by the same owner utilizing the same approach as the punk mentioned above.

One of the most sought-after NFT collections amongst NFT whales and newcomers to the NFT scene, CryptoPunks is still one of the most sought-after NFT collections. CryptoPunks is credited with this image.

CryptoPunks Have Continued To Make News In Recent Months

One of the most remarkable developments in the collection is the sale of the CryptoPunks NFT to the same owner, which is only one of many noteworthy developments. Last month, the floor price of the renowned collectibles dropped to below 80 ETH in secondary markets like OpenSea for a brief period.
Despite this, punks continue to be among the most sought-after NFTs on the market. Their popularity may even grow now that everyone can buy into their favorite punk band for as little as $10.

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