The 500 million dollar cryptopunks saga shows the immense possibilities of real decentralization

When it comes to NFT sales, cryptopunks are one of the most dominant names. Hundreds of "punk" nfts were developed by the NFT inventor Larva Labs and changed owners on secondary platforms, which means that the creators have been able to collect billions of dollars to this day.

shortly before the Halloween weekend 2021, Cryptopunks became the most discussed topic on the Internet. Everyone in the crypto community was amazed that someone actually paid Eth (ether) worth $ 532 million to buy Cryptopunk 9998, one of the 10,000 pixelated JPEGs.

A look behind the scenes of the record-taking sales

as soon as Twitter Cryptopunk's bot account tweeted the announcement , which emphasized that a certain address had bought the NFT for 124,457.07 ETH, crypto -se experts jumped into the action. Social media users quickly pointed out that the sale may have been a planned "advertising" because cryptopunks are among the most popular NFTs. But speculation took an interesting turn because it was found a few hours later that it was not legitimate, even though a sale had taken place.

As more and more industry experts began to examine further details of the transaction, red flags appeared. While some suspected a brazen act of illegal money laundering, others assumed that it was only another day of the Wash Trading. At the same time, people wondered why someone should venture such a risky undertaking in a decentralized network like Ethereum, which is known for their transparent recording.

After thorough research, crypto experts pointed out that someone has transferred the pixelated NFT between Ethereum addresses before selling it at such a high price. Apparently all funds were borrowed, especially by the Defi credit platform Compound.

what happened here?

Well, the sale of Cryptopunk 9998 is a well-executed flash loan attack. It wasn't money laundering, but someone used a safety-free defi loan to artificially "inflate" the value of the NFT. You borrowed more than 124,000 ETH through a flash loan, sold the NFT and then bought back with the original account and paid back the loan at the same time.

While the defi ecosystem has to take better measures to ensure that this type of instances do not repeat itself, it is also important to appreciate the beauty of the underlying blockchain technology. Within a few hours the crypto community was able to do the series of transactions, with the address of the address Wallet owners are connected . The transparency of the distributed Ledger technology (DLT) played a crucial role in showing that buyers and sellers were the same person.

per Sascha Epp, co-founder of , "The 500 million flash loan, regardless of what the arguments of the individual were, shows the almost endless and immense opportunities that can offer real decentralization, defi and NFTS. Versatility that is often overlooked in this area, which is clearly illustrated in this case. ”

about the future of the NFTS Lior Yaffen speaks, jelurid co-founder and director notes:" I thought a lot about the combination of NFT and digital graphics and how they can be used together, but things still do not fit together. Allegedly acting in the chain, but it is not the same because the protection of digital content is much more difficult than the protection of physical content and there is no reasonable legal basis for protecting the rights of the owners of digital content before imitating.

Are NFTs just another "internet trend" that will be passed in earlier than expected?