An NFT trader was devastated on Friday when he discovered that a CryptoPunk he bought for 77 Ethereum went up in smoke after he accidentally sent the expensive digital artwork to a burning address.
Burn addresses, which are digital wallets that do not have a private key, are one-way gateways that can only receive assets such as cryptocurrencies and NFTs. As a result, the NFT was permanently removed from circulation, preventing it from ever being traded or owned again.
Brandon Riley, who bought CryptoPunk #685 two weeks ago, said he made a mistake when he tried to wrap NFT to take a loan against it on Twitter. He told Decrypt he planned to post CryptoPunk #685 to NFTfi.com, where he could earn a return of around 7% per year.
CryptoPunk #685 was worth about $129,000 in Ethereum when it was acquired by Riley, according to Ethereum block explorer Etherscan.
Originally created in 2017, CryptoPunks is widely regarded as a “blue chip” gathering, on par with the likes of Yuga Labs’ Bored Ape Yacht Club. With a market value of over $1 billion, the cheapest CryptoPunk is worth just over $109,000, according to NFT Price Floor.
However, CryptoPunks were created before ERC-721 was established as a token standard for NFTs, making them incompatible with some marketplaces and applications designed for decentralized finance – such as NFTfi.com.
Using one guide he found online, Riley tried to pack in his punk as an ERC-721 token, creating a new digital token that proved he owned CryptoPunk #685 but would be compatible with NFTfi.com. But by entering the wrong address, CryptoPunk #685 is now gone forever.
Riley’s plight is indicative of problems faced by many in the digital asset industry due to the often complex and irreversible nature of transactions. And because there are no financial intermediaries involved, there is nothing Riley can do to recover his lost CryptoPunk, which he described as “both the beauty and the curse of self-storage.”
A Twitter user named NFToga pointed out that the guide used by Riley has since been updated, including language specifically warning people not to send CryptoPunks to wallets formatted as burn addresses.
Riley requested some form of reprieve, asking Yuga Labs – which bought The IP of CryptoPunks from Larva Labs last year – if he could buy the v1 version of CryptoPunk #685. CryptoPunks v2 was released after a bug was found in the original collection’s smart contract.
Riley said he has yet to hear from Yuga Labs after tagging them in his posts on Twitter, and Yuga Labs did not immediately respond to requests for comment from Decrypt.
Sometimes NFTs are not burned by accident, but rather as a way of making a statement. Last month, Jason Williams burned BAYC # 1626 – worth $169,000 at the time – to symbolically move the asset’s underlying network from Ethereum to Bitcoin in the form of an inscription made through Ordinals.
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