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A trader walked off nearly $1.5 million richer after tricking a bot copying his trades to buy a slew of NFTs at a markup.
NFT trader’s $1.5 million bot chess move
YouTuber and nonfungible token (NFT) trader Hanwe Chang said he scored 800 Ether (ETH), worth around $1.5 million, by tricking a rival trader’s bot into buying his own inflated NFTs.
In an Aug. 5 X (Twitter) post, Chang said he noticed a bot was copying his bids on the NFT marketplace Blur and decided to trick them.
NFT-focused account, A Raving Ape, speculated that from a separate, anonymous wallet, Chang purchased multiple Azuki NFTs sharing the same background color.
Context on how @HanweChang executed a plan to perfection and made 800e by selling "Off White A - Background color" azuki at 50e each and azuki elementals at 15e each.
This is an epic case of PvP in the current NFT trading market ⚔️
Hanwe has been coasting at the top spot of… pic.twitter.com/M8Ujm8CquJ
— A-Raving-Ape.eth (@a_raving_ape) August 5, 2023
Knowing bots were copying his trades, Chang placed an inflated bid on the NFTs held in his anonymous wallet from his publicly-known hanwe.eth wallet.
Once a bot automatically copied the inflated bid, Chang accepted it from his anonymous wallet and was able to palm off the NFTs at a significant markup.
The owner of the bot, known as elizab.eth, responded to Chang’s post claiming the funds were stolen and offered to discuss a 10% bounty if the funds were returned.
We would like to discuss a bounty with you. We are offering a 10% bounty of any funds stolen from our bot, which are yours to keep if you return the remaining 90%.
— elizab.ethᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠᅠ (@ThinkingETH) August 5, 2023
Chang’s on-chain move triggered discussion over its legality.
Lawyer Gabriel Shapiro said he thinks elizab.eth “might have good legal claims” to get their ETH back from Chang’s trick — but only if they hire a skilled litigation attorney.
NFT volumes nearly halve in July
NFT volumes have continued to slide in the ongoing bear market, having sunk by almost half in July.
Figures from NFT data aggregator CryptoSlam show United States dollar sales volume decreased nearly 42% over July, starting with $22 million in daily volume before sinking to $12.8 million on July 31.
Weekly NFT sales with black line depicting U.S. dollar sales volume. Source: Cryptoslam!
July’s drop comes after a significant rally in late June, with daily sales volumes peaking at nearly $58.5 million on June 27, the largest trading day since $61.9 million on March 16.
Royalties from NFTs are also biting creators. A July 25 report from Nansen said out of the 699,816 ETH in royalties paid to NFT projects, just 9.4% of the figure was in the first half of 2023.
Nansen said the effective fee rate for royalties has seen a significant downtrend. Average royalties in 2022 were 2.5%, but as of July 2023, they had dropped to 0.6% — a 98% drop.
Slow month for NFT thefts
On the other hand, NFT-related thefts have seen their slowest month in 2023.
Figures by blockchain security firm PeckShield shared on Aug. 6 show around $1.7 million worth of NFTs were stolen in July. The figure marks a 31% decrease from June.
PeckShield said half of the stolen NFTs were sold within less than three hours, or 165 minutes, on marketplaces such as Blur and OpenSea after being nabbed.
#PeckShieldAlert In July 2023, ~$1.73M worth of #NFTs were stolen, marking a 31% decrease compared to the previous month. Within a span of 165 minutes, half of the stolen NFTs were promptly sold on various marketplaces. The percentage of stolen NFTs initially sold on @blur_io… pic.twitter.com/cknsefpfwe
— PeckShieldAlert (@PeckShieldAlert) August 6, 2023
Blur had the highest amount of stolen NFTs at just over 67%, while OpenSea had just under 20% sold through its platform, PeckShield claimed.
Just over $41.5 million worth of NFTs have been stolen in 2023 up until the end of July. February was the biggest month for NFT thieves, with $16.2 million worth of tokens stolen.
Gary Vee’s NFT project also steps into sneaker trend
VeeFriend’s, the NFT project by entrepreneur and internet talking head Gary Vaynerchuck, has joined the latest craze of NFT-related sneakers.
On Aug. 4 VeeFriend’s announced it partnered with Reebok to launch a limited edition sneaker only available to those holding an alpaca-related NFT as part of the collection.
— VeeFriends (@veefriends) August 3, 2023
The shoe looks like any other, aside from a few changes. The tongue of the shoe depicts the original hand-drawn version of VeeFriend’s alpaca NFT, and the NFT project’s logo appears in place of Reebok’s.
Other Nifty News
The Federal Bureau of Investigation has finally caught on that criminals are hijacking social media accounts and posing as legit NFT and crypto space figures, publicizing a warning of the trend on Aug. 4.
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