Opensea Bug Opened Door for Sneaky Shoppers to Snag $1 Million in NFTs for a Steal
DailyCoin
Published Jan 26, 2022 02:10AM ET
Updated Jan 26, 2022 02:31AM ET
Opensea Bug Opened Door for Sneaky Shoppers to Snag $1 Million in NFTs for a Steal
On Tuesday, Bloomberg was first to report on a technical loophole that cost traders of non-fungible tokens (NFTs) on Opensea – the wildly popular digital asset trading website – hundreds of thousands of dollars in losses.
What happened is that traders of high priced NFTs – think CryptoPunks, Bored Ape Yacht Club, World of Women – moved some of their pricey NFTs over to Opensea to secure premium prices. The thinking being that Opensea is the biggest NFT marketplace so it should command the highest prices. However, when the original owners moved the NFTs to the Opensea wallet, many of them left the old listings open on their other wallets where the NFT was still at a much lower price.
Sneaky shoppers who knew those old, discounted priced listings were still active and linked to the NFT – made the purchase on the bargain basement page – snagging the asset right out from under the owner who failed to close the older listing. The unscrupulous buyers then quickly flipped the newly acquired NFT at the much higher, current market price – leaving the original owner in a fog, empty-handed with a loss in the thousands or even tens of thousands of dollars.
“It’s a bit like being on eBay (NASDAQ:EBAY) and listing something for sale,” said Tom Robinson, chief scientist and founder of Elliptic, an NFT data tracking firm.
“If you want to increase the price of this, you wouldn’t create a new listing and leave the old one going. You’d replace that listing. The problem here is that people aren’t canceling the original listing.” However, there are high gas fees associated with taking down a listing – the same way there are high fees when you initially set up an NFT listing. For many sellers, they never think that the listing is still active and actionable. So if they happen to be moving the asset back-and-forth among multiple wallets, that’s where the bug kicks in and seems to have occurred here, according to Elliptic.
The story went on to note that a spokesperson for the Opesea platform told Bloomberg the issue arises because “OpenSea cannot cancel listings on behalf of users. Instead, users must cancel their own listings.” If they don’t, that’s when trouble happens.
The old admonition goes “buyer beware,” but clearly in this instance perhaps it’s more appropriate to say “sellers be smarter.”
EMAIL NEWSLETTER
Join to get the flipside of crypto
Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.
[contact-form-7] You can always unsubscribe with just 1 click.
Continue reading on DailyCoin
Get The News You Want
Written By: DailyCoin
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.