NFT investor mistakenly burns $135,000 CryptoPunk while borrowing money
An NFT investor went through the unfamiliar process of wrapping NFTs and mistakenly sent the asset to a burn address, permanently deleting it from circulation while trying to borrow money.
Collector accidentally burns his $135,000 CryptoPunk
Cryptocurrency influencer Punk9059 tweeted on March 25 that he noticed that CryptoPunk #685 had been transferred to the address for destruction (0x000000).
CryptoPunk is one of the first and most renowned NFT collections. The NFT in question, CryptoPunk #685, had recently been acquired by a new owner when he unintentionally burned it.
The owner attempted to wrap the NFT after investing 77 ETH in it so they could use it as collateral to borrow money to buy another NFT. His net worth was reduced by a third due to the event, or 77 ETH, worth about $135,372.16.
While closely following the instructions, he said that it was a mistake to burn CryptoPunk #685 while attempting to seal it.
According to Riley, he ran into issues with the encapsulation process. He made a mistake while trying to create a proxy wallet. He believed it was the proxy address he should be using when he misunderstood the phrase “if the address is not 0x00…0000, you can skip to step 2,” which resulted in the final, fatal error.
Riley had been investing for a while, so he knew how essential it was to purchase brand-new NFTs just before the crypto markets entered a new period of growth. Thus, he decided to borrow money against CryptoPunk #685 by employing a well-known technique called “wrapping.”
Riley’s perception of the accident was that he guessed he shouldn’t have attempted that on his own. However, Twitter users also linked Riley’s loss to a confusing user interface and challenging instructions. As a result, everyone in the community agrees that the crypto ecosystem’s front-end processes must be improved.