Buy CryptoPunk NFT For 77 ETH, Owners Lose IDR 2 Billion Of Digital Assets Because Of This!

NFT Cryptopunks. (Photo; Doc. NFT Hours)

JAKARTA - An NFT CryptoPunk owner named Brandon Riley recently made a mistake while tying his digital assets to an NFT loan platform. He wants to secure a 7 percent loan from CryptoPunk #685 which he bought worth 77 ETH (equivalent to IDR 2 billion) two weeks ago.

However, Riley made a mistake during the process and accidentally sent her CryptoPunk to the burning address (burn address) which is the address for the permanent destruction of digital assets.

For information, Wrapping NFT is the process of converting a non-fungible token (NFT) into a trading platform on several different trading platforms. This is done by taking NFT assets and putting them in another smart contract that issues new NFTs that can be exchanged or traded on other NFT markets.

Riley immediately admitted his mistake and said he was not a skilled developer or tech expert, and should not try to do the self-binding process. There is one step in the binding hint that confuses him.

Since Riley lost her CryptoPunk, the binding measures she followed were updated to clarify the procedure more clearly and prevent future errors.

CryptoPunk was created before the ERC-721 standard was adopted, so these digital assets are not compatible with many Web3 markets and protocols. By tying a Punk, holders can create new digital tokens to prove ownership of their assets and use previously incompatible platforms.

The binding process involves interactions with tokens at the contract level. It's not very user-friendly, and popular binding website WrappedPunks.com, warns, "We strongly don't recommend tying your Cryptopunk unless you're used to interacting with smart contracts via etherscan.io. If you decide to tie your CryptoPunk, you'll be interacting with the Ethereum blockchain so every transaction can't be canceled."

Punk #685 is gone forever, and with that, Brandon Riley has also lost a third of his fortune. This situation highlights the dual nature of blockchain technology. We benefit from eliminating intermediaries but also have to suffer the consequences.

In Riley's view, this is "the beauty and curse of self- custodial" where we as users must understand the risks that exist and avoid fatal errors in the use of this technology, quoted from NFT Evening.

Additional information, self-custody is a term in the crypto world that refers to full ownership of crypto assets by its own owners, without third parties such as banks or traditional financial institutions controlling access or use. In this context, crypto asset owners themselves are fully responsible for the security and security of their crypto assets.