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 he was following a how-to guide to ready the collectible as loan collateral.
I was so focused on following the instructions exactly, Brandon Riley wrote on Twitter, that I slipped up, destroying a third of my net worth in a single transaction.
Rileys mistake illustrates how the often opaque and complex world of digital assets can lead laypeople to lose nest eggs by typing the wrong address or misplacing a password. His problem is one even early Bitcoin adopters have struggled with, most famously James Howells, who threw away a hard drive containing keys to a Bitcoin wallet containing some $200 million worth (at current prices).
Today I accidentally burned a @cryptopunksnfts trying to wrap punk 685.
I was so focused on following the instructions exactly, that I slipped up, destroying a third of of my net worth in a single transaction. @yugalabs please sell me the @v1punks 685 as a consolation. pic.twitter.com/jHoTGvlc7j
Brandon Riley (@vitalitygrowth) March 25, 2023
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 the 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 go-to blockchain for minting, or creating, 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 collectiblea pixelated man with a mohawk and sunglasseshe planned to borrow some liquidity from it.
Riley needed to wrap his CryptoPunk in whats now the standard protocol in order to post it on NFTfi.com, a decentralized lending marketplace, according to Decrypt.
Admittedly not a Web3 developer, Riley was following a guide on how to ready 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wrong digital wallet, which turned out to be a burn address, or a wallet where tokens like NFTs can be sent but never withdrawn.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 is no ones fault but my own.
Riley said he asked Yuga Labs, which declined to comment for this story, to issue him an earlier version of CryptoPunk #685, but the Web3 firm has yet to come to his aid. But another crypto enthusiast did, gifting him a version of CryptoPunk #685 that now resides on Bitcoins blockchain.
Huge thanks to @olliesblog for being so kind and selfless in resurrecting Punk 685 for me. He now lives on the Bitcoin blockchain as an ordinal, inscribed on a satoshi from over a decade ago! https://t.co/5i1n14HIwe pic.twitter.com/4hVPxxcb4Y
Brandon Riley (@vitalitygrowth) March 27, 2023
Hard to feel excited after burning a punk. Haha, Riley later joked in a Twitter direct message.
Still, he wrote, he hasnt soured on the whole experience.
Ive been doing this for almost 2 years. Been on a roller coaster the whole time, from 5 figures to 7 and holding on through this bear market, he told Fortune. No, it wont change anything in so far as how I collect, only that I am more careful and get help in the form of expert eyes when I try to do anything that involves risk (as I have in the past).
