A strange CryptoPunk owner’s worst nightmare came true over the weekend. Brandon Riley accidentally sent his precious PFP to a burned address and lost it forever. How did this monumental mistake happen?
Image Credit: CryptoTimes.io
Why did someone burn a rare CryptoPunk?
Punk holder Brandon Riley bought CryptoPunk #685 for 77 eth just two weeks ago. He then decided to use the NFT lending platform. nftfi.com to secure a 7% loan against the digital asset. Unfortunately, Riley made a mistake during the “wrapping” process required to use the NFTfi.com service with a CryptoPunk. As a result, he accidentally sent his Punk to a burned address.
Riley immediately took ownership of the mistake. He tweeted that he is not a developer or techie, and should not have attempted the wrapping process himself. There was a step in the wrapping instructions that confused him. Since Riley lost the Punk, he updated the set of instructions he was following to clarify the procedure and prevent future mistakes.
Why do people wrap CryptoPunks?
Larva Labs created CryptoPunks before the ERC-721 standard was adopted. As a result, they are incompatible with many Web3 markets and protocols. By wrapping a Punk, holders can create a new digital token to prove ownership of their assets and use previously incompatible platforms.
Image credit; LarvaLabs.com
The wrapping process involves interacting with the token at the contract level. It’s not particularly easy to use, and popular wrapping website WrappedPunks.com warns: “We highly recommend wrapping your Cryptopunk unless you are familiar with how to interact with smart contracts via etherscan.io. If you decide to wrap your CryptoPunk, it will interact with the Ethereum blockchain, so any transaction is irreversible.”
Punk #685 is lost forever, and with it, Brandon Riley also lost a third of his net worth. This situation highlights the double-edged nature of blockchain technology. We get the benefits of cutting out the middlemen, but we must also suffer the consequences.
This dichotomy, Riley observes, is “both the beauty and the curse of self-guarding.”
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This article is educational material.
As always, do your own research before making any type of investment.
