Morning Minute | 🚨 The Million Dollar Punk Heist

TylerD's Market Summary

🚨 Ape Cryptopunk Worth $1.5M 'Stolen' for 10 ETH

Six days ago, an Ape Cryptopunk sold for 620 ETH or $1.48M.

They're some of the most valuable and elite Cryptopunks in the collection.

Well yesterday afternoon, one sold for 10 ETH in what's being called the "greatest Cryptopunk heist of all time."

What happened

Ape Cryptopunk 2386 was purchased for 10 ETH ($23,000) yesterday due to a loophole in a now-defunct fractionalization site.

That's 98.5% below fair market value and thus being called a "heist".

For background, the punk was fractionalized years ago on a site called niftex which is no longer functional. There were 10,000 shares of the punk distributed across several holders.

The punk remained fractionalized on the site and in the escrow contract even after the site became dysfunctional.

Fast forward to 2 weeks ago, and someone figured out a loophole in the contract allowing a buyout with a 14 day grace period for holders to accept or reject. If they didn't reject it by bidding a slightly higher amount for the punk, the buyout would go through.

The heister submitted a 0.001 ETH bid per share (10 ETH in total), and yesterday it went through.

Meaning they had purchased the punk "fair and square" for 10 ETH, which has already caught a 600 ETH bid on secondary.

The steal of the year, and perhaps the century.

But it gets worse.

The Failed Block Attempt

Notable Ape Punk owner, founder and collector gmoney tried to block the buyout from happening.

He was alerted to the situation late Tuesday, as an 8% holder of the shares.

Then he tried to block the buyout by bidding 0.000001 ETH per share - unfortunately not enough.

The bid had to be higher, at 0.0010000001 ETH minimum for a successful block.

No one realized this, including gmoney, and the block failed.

And the heister ended up getting the punk for 10 ETH, now worth at least 600 ETH (a $1.38M gain in mere hours).

Why It Matters

There's an ongoing debate on whether this was an ethical action.

Those in the "code is law" camp are of the mindset that the heister did nothing wrong - they acted cleverly within the rules of the smart contracts to make a purchase, and it's the fault of the owners for not acting. This is how decentralization works.

Many are on the other side, in that holders didn't have a "fair" shot to block the buyout, and that problems like this will prevent crypto from broader adoption. The buck needs to stop somewhere.

My view - the share owners took on major risk holding shares of a valuable digital asset in a defunct fractionalization site.

But the move is clearly unethical and should not be celebrated. It's very unclear that holders 1) knew this was happening and/or 2) knew how to block it. That's a problem.

I don't think broader crypto is at risk because of this, but this does likely put the nail in the fractionalization coffin.

🚚 What else is happening in NFTs?

Here is the list of other notable headlines from the day in NFTs:

• ETH led NFT trading volume with $3.45M on the day; Bitcoin was next with $2.33M, and then Solana with $2.3M
• ETH NFT leaders mostly chopped; Pudgy +2% at 10.77 ETH, BAYC even at 12.1 ETH, Azuki even at 4.72, Milady -3% at 3.4; Doodles -9% to 1.93 ETH
• alignDRAW (+28%) & Ninja Squad (+28%) were notable top movers
• An Ape Cryptopunk sold for just 10 ETH after a "heist" from a rationalization protocol where the buyer bid 0.001 ETH on 10,000 shares, none of the share holders denied the bids and the bidder won the Punk (for 10 ETH)
• BTC NFT leaders were very green; NodeMonkes +9 at 0.135 BTC, Puppets +6% at 0.093 BTC, Quantum Cats +10% at 0.272 and OMB -1% to 0.16
• Nat Cats announced a Blockdrop, a new collection which will drop following similar DMT functionality 1-1 to Nat Cat owners
• The Runes leaders were also green; DOG +2% at $259M mc, RSIC +7% at $62M mc, PUPS -10% to $25M
• Solana NFTs were also mostly green; Mad Lads even at 59.7 SOL, SMB Gen 2 +4% at 25.3, DeGods +3 at 25.6, Claynosaurz +21% to 18.1
• Beeple will host a live Election Night event at Beeple Studios, not requiring an NFT and free to attend for all

💰 Token, Airdrop & Protocol Tracker

Here's a rundown of major token or airdrop news from the day:

🌎 Around Crypto and Web3

A few other Crypto and Web3 headlines that caught my eye:

• Crypto majors are green this morning up 1-3%; BTC +2.5% at $57,940; ETH +1% at $2,345, SOL +3% at $134
• Memecoin majors are slightly green with DOGE +2%, PEPE +2%, WIF even, BONK +2%, MOG +2%; POPCAT +14% to $640M
• SWIFT announced a partnership with major banks to connect the SWIFT network to ETH sepolia as it experiments with digital assets
• Reuters reported that India led the way in global crypto adoption for the 2nd year in a row
• Singapore's usage of stablecoins as payments doubled in Q2 2024 to $1B
• The UK introduced a bill to classify crypto assets and NFTs as personal property, giving them recognition and certain protections

🚀 Memecoin Movers 

• $AURA (+77%, $10M market cap, SOL)
• $CATE (+60%, $28M market cap, ETH)
• $SELFIE (+25%, $17M market cap, SOL)
• $mini (+23%, $16M market cap, SOL)
• $KOKO (+19%, $39M market cap, SOL)

📈 NFT Floor Price Increase (ETH)

• CryptoCitizens (61%, 0.34 ETH Floor)
• Ninja Squad (29%, 0.29 ETH)
• alignDRAW (28%, 1.85 ETH)
• InfiniGods (27%, 0.24 ETH)
• HV-MTL (22%, 0.05 ETH)

🗓 Upcoming Mints and Events

Today is another slower day of mints.

The highlight is likely BTC Machine back with Battle Royale, launching at a decent time as Ordinals are showing signs of life.

See the full list and dive in for more details with Swizzy's daily mint monitor. 

• sneaky - poonks (9:00 a.m. ET)
• ONMI (10:00 a.m. ET)
• Market Elite (11:00 a.m. ET)
• Jan Robert Leegte - Selection (12:00 p.m. ET)
• BTC Machine - Battle Royale (3:00 p.m. ET)

Enjoy this write-up and/or want to sponsor the Morning Minute? Follow along with me on Twitter @tyler_did_it or reach out via email to tyler.warner@luckytrader.com.