The Bored Ape Yacht Club is one of the hottest NFT projects around. Selling for dozens of Ethereum (ETH) each, one NFT in this digital collection on the blockchain can cost as much as a house. That’s why when a Bored Ape NFT listed on the OpenSea marketplace, which has been called the eBay of NFTs, for a mere 0.75 ETH, or $3,000, instead of its intended price of 75 ETH, worth $300,000, crypto investors thought there must be some mistake. They were half right.
The price was a case of a mistaken decimal point, but the damage was already done. It happened when the seller, Max, in his words “fat-fingered a listing,” which refers to a trader making a typo that results in a wrong trade, or in this case an incorrect listing price. It didn’t take long for a buyer to swoop in and scoop up the Bored Ape at a bargain price, leaving the seller unable to hop in his DeLorean and set things right. Max is quoted by Cnet as explaining,
“How’d it happen? A lapse of concentration I guess. I list a lot of items every day and just wasn’t paying attention properly. I instantly saw the error as my finger clicked the mouse but a bot sent a transaction with over 8 ETH of gas fees, so it was instantly sniped before I could click cancel, and just like that, $250k was gone.”
Bored Ape #3547 was purchased for 0.75 ETH
— boredapebot (@boredapebot) December 11, 2021
It was a costly mistake for the seller, one that based on his response he seems to have taken in stride. It is also a reminder of some of the hidden risks that are lurking in a decentralized market. The peer-to-peer (P2P) nature of cryptocurrencies like Ethereum makes it so there is no need for an intermediary, like a bank. While decentralization is part of crypto’s charm, as it removes layers of fees and delivers near real-time transactions, it also means that there is no customer service line waiting on the other side when things go wrong.
Remember, sometimes you’re going to lose gas, sometimes the smart contract is bad, sometimes websites crash, sometimes floors brick & you lose Eth.
These are all risks of NFT trading. The industry is a baby & these risks are the reason why we can regularly make 10-100x returns.
— maxnaut.eth (@maxnaut) November 6, 2021
Similarly costly mistakes and worse have happened in crypto. There are Reddit threads filled with tales of woe in which investors lost access to their bitcoin wallet, as a result of which their funds could not be recovered. Nobody is immune, even companies. Earlier this year crypto trading platform BlockFi mistakenly sent bitcoin to clients when it was trying to send Gemini Dollar (GUSD), a U.S.-dollar pegged stablecoin. In this case, most of the transactions were spotted and reversed. Not every victim will have clients or peers so eager to return funds.
Now that the NFT market has come into its own, it has become vulnerable to some of its own potential risks. In the Bored Ape sale, the fortuitous buyer, which Max said was a bot, didn’t waste any time to relist the NFT for a profit. To score the Bored Ape in the first place, the buyer had to dole out more than $20,000 in ETH for gas, which are the fees paid to the network for transactions. Ethereum’s gas fees have been on the lofty side this year amid the rise of NFTs and decentralized finance (DeFi).
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