Here’s How a Trader Acquired a Rare $1.4M CryptoPunk NFT For $23K

An NFT trader has acquired a rare CryptoPunk NFT for roughly 98% less than its floor price after the asset’s other owners failed to block the proposed buyout offer.

In a series of tweets, pseudonymous Solidity developer and auditor Quit said CryptoPunk 2386’s buyer, whose address starts with 0x282, carried out the purchase using a combination of “clever sleuthing” and an “unfortunate miscalculation.”

A Little Background Story

There are 10,000 CryptoPunks in existence, with three special types, including 88 Zombie, 24 Ape, and 9 Alien-themed collectibles. Punk 2386 is one of the 24 Ape-themed Punks with a headband and small black shades.

In September 2020, Punk 2386 was fractionalized into 10,000 ERC-20 tokens and spread among 257 holders through the now-defunct Niftex. Niftex enabled NFT owners to turn their assets into fungible fractions, allowing parts of those fractions to be sold.

The floor value of Punk 2386 is 600 ether (ETH), which at today’s ETH price amounts to roughly $1.4 million. Although Niftex has shut down its operations, the fractionalized parts of the CryptoPunk have remained in the protocol’s smart contracts.

Niftex’s contracts were created so that any NFT shareholder could propose a buyout price, called a “shotgun,” to acquire all the fractionalized parts of the asset. The offer goes through if no shareholder successfully counters it after 14 days.

“The Steal of The Century”

Trader 0x282 initiated a shotgun on August 28, and the 14-day period ended on September 11. They proposed a price of 0.001 ETH per share, amounting to 10 ETH for all 10,000 shares.  

Quit revealed that a couple of shareholders noticed the offer, and while one did nothing because they felt there was more time, the other attempted to block the offer. The shotgun contract requires a shareholder blocking the buyout to purchase the proposer’s shares at higher than their proposed price. Quit said a valid counter needed to be 0.0010000001 ETH per share.

Unfortunately, the countering shareholder, labeled gmoney, submitted a counterclaim of 0.000001 ETH, less than the required amount to block the buyout offer. Quit said the shotgun would have been blocked if another shareholder contributed 10,000 wei to the counterclaim.

After the waiting period elapsed, trader 0x282 walked away with the $1.4 million Punk for about $23,000, in what Quit tagged “the steal of the century.”