A collector of non-fungible tokens (NFTs) from the CryptoPunks collection accidentally burned one of his NFTs worth USD 135,372.16 while attempting to wrap it.
Brandon Riley, the investor, had purchased CryptoPunk #685 for 77 Ether on March 13, hoping to hold onto it for the long term. He wanted to borrow some money against the NFT to buy another one before the crypto markets surged. However, while following the wrapping process, he sent the NFT to a burn address, resulting in the permanent deletion of the NFT from circulation.
Despite rumors that Riley had deep pockets, he clarified that he had bought CryptoPunk #685 using borrowed money. He said that he was not planning to sell the NFT on Blur but intended to keep it forever as it was the exact reverse number of his other NFT. The incident raised concerns about the complexity of the instructions and user interfaces in the crypto ecosystem. The community called for a revamp of front-end processes to prevent similar incidents from happening in the future.
According to a CoinGecko report, NFT wash trading increased by 126% in February, with a total volume of USD 580 million. The top six NFT marketplaces are Magic Eden, OpenSea, Blur, X2Y2, CryptoPunks, and LooksRare. The report also stated that X2Y2, Blur, and LooksRare experienced a rise in wash trading for the fourth consecutive month.