NFT Trader Accidentally Burns $129K CryptoPunk

NFT trader Brandon Riley paid 77 $ETH (Ethereum) for the NFT, then destroyed it... until its resurrection as a Bitcoin Ordinal.

An NFT trader was left devastated on Friday March 24th to discover that a CryptoPunk he purchased for 77 Ethereum went up in smoke after he accidentally sent the piece of digital art to a burn address.

Burn addresses, which are digital wallets that don’t have a private key, are one-way gateways that can only receive assets like cryptocurrencies and NFTs, meaning the NFT was permanently removed from circulation, preventing it from ever being traded or owned again.

However, a Twitter user by the name of @olliesblog replied to a viral tweet from Riley, saying that he had inscribed the burnt punk onto Ordinals, the Bitcoin NFT network.

Brandon Riley, who purchased CryptoPunk #685 two weeks ago, said he made an error when attempting to wrap the NFT to take a loan against it on Twitter. He told Decrypt he planned on posting CryptoPunk #685 to NFTfi.com, where he could earn a yield of around 7% per year.

CryptoPunk #685 was worth approximately $129,000 in $ETH when it was acquired by Riley, according to the Ethereum block explorer Etherscan.

Originally created in 2017, CryptoPunks is widely viewed as a “blue chip” collection, on par with the likes of Yuga Labs’ Bored Ape Yacht Club. The cheapest CryptoPunk is worth just over $109,000, according to NFT Price Floor.

However, CryptoPunks were created prior to ERC-721 being established as a token standard for NFTs, making them incompatible with some marketplaces and applications designed for decentralised finance including NFTfi.com.

Using a guide he found online, Riley tried to wrap 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 inputting the wrong address, CryptoPunk #685 was almost lost forever.

Riley’s situation is indicative of issues that many face in the digital assets industry due to the often complex and irreversible nature of transactions. Also, due to there being no financial intermediaries involved, there was nothing Riley could do to get his lost CryptoPunk back, which he described as “both the beauty and the curse of self-custody” - that was until he was met with a very generous gesture from @olliesblog, who made sure the CryptoPunk was reborn on Bitcoin Ordinals' network.