An NFT investor burnt a $135,000 CryptoPunk while trying to collateralize a loan, a weird turn of events. The tragedy occurred late on March 24th, 2023, and the investor is still reeling from the shock and dismay it has caused him.
According to those familiar with the situation, the investor had been seeking to borrow money against his valuable CryptoPunk in order to start a new business. He had tried numerous other loan sites but had been unsuccessful for various reasons. Investor got fed up with the slow pace of development, so he tried his hand at developing a new NFT using his CryptoPunk.
When establishing a new NFT, the old one is burned and the new one is made from scratch using the latest specs. Unfortunately, the investor’s original CryptoPunk was burnt in a moment of misunderstanding, and no new one was made.
When the investor realized his error, he quickly asked for assistance from the blockchain network. Unfortunately, it was too late to salvage the NFT that had caught fire. Now the investor has no choice except to accept defeat.
The incident has sparked concern among NFT experts, who are now warning against attempting to develop new NFTs without sufficient background knowledge. This incident also emphasizes the importance of raising people’s level of knowledge and understanding of NFTs and their underlying technology.
Human error is to blame for the loss of yet another priceless NFT. In 2021, a user destroyed a one-of-a-kind NFT artwork by acclaimed digital artist Beeple while trying to move it to an another wallet. This incidence spurred a discussion on how to prevent similar incidents through enhanced security and user interfaces.
These kinds of occurrences are likely to increase in frequency as the use of NFTs becomes more widespread. Investors and collectors should exercise caution and seek expert advice before making any major adjustments to their holdings of NFTs.
The investor has likely learned an expensive lesson, as the burnt CryptoPunk is unlikely to be recovered. Those in the NFT community should take caution and remain attentive while dealing with these precious digital assets in light of this tragedy.