In early August 2022, it was reported that an anonymous person purchased over 100 Ethereum-based non-fungible tokens (NFTs) from the popular CryptoPunks collection. According to reports, the investor tried not to attract too much attention and used the decentralized block production protocol, MiningDAO. Therefore, he bribed a miner to include all CryptoPunks purchases in a single Ethereum block. The trade was well planned and calculated, as a member of the community explained. Previously, the anonymous buyer made a minor purchase at block 12924823, as Etherscan noted. Typically, to purchase one of these NFTs, a user performs a “normal” Ethereum transaction. The anonymous buyer tried to soften an NFT market reaction. As such, they operated off the radar.
7 million dollars in CryptoPunks
The CryptoPunks FeverIn total, some of the cheapest CryptoPunks in the collection have hit a staggering $7 million. The actions taken by the buyer can be a preview of a pattern used by big players to make high-value transactions without scaring the market, as the community member stated:
“(…) The buyer bribed a miner to take all “buy punk” transactions and put them all in front of a sequential block in private. This didn't give anyone a chance to raise their price or withdraw because no one saw the txs until the block was mined.”
The event was one of many that drove the Ethereum NFT Market into a state of frenzy. Around the same time as the anonymous purchase, Vaynermedia CEO Gary Vaynerchuk purchased a single CryptoPunks for $3.76 million. In the next 24 hours of this purchase, items comprising the CryptoPunks collection had $50 million in sales.
Ethereum network activity explodes in CryptoPunks fever
A recent report by research firm Coinmetrics reported massive growth in the Ethereum-based NFT sector for 2022. As seen below, the sector saw significant growth in September 2020 and a decline in November and December of that same year. Source: CoinMetricsThe amount of ERC-721, the Ethereum standard used by CryptoPunks and other NFTs, and the transfer count exploded during March 2022. This metric saw a significant decline two months later, but jumped to an all-time high times with more than 50,000 transactions in July.Since its birth, the NFT CryptoPunk collection has seen exponential growth in Ethereum sales. 2018 and 2019 represent their lowest sales years, but the metric soars in July 2020, with “DeFi Summer”.Source: CoinMetrics This has morphed into other NFT based art platforms such as Art Block, Coinmetrics stated:
“Art Blocks, a platform to create NFT art, has also seen the biggest high activity of all time in recent weeks after Three Arrows Capital entered a shopping spree, mainly focused on Art Blocks and CryptoPunks. With NFTs becoming a cornerstone of Ethereum's growing digital economy, institutional players may be paying attention and contributing to this recent growth in volume and activity.”
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