A ‘bug’ discovered a few weeks ago in OpenSea, the leading NFT marketplace, enabled more than $1M worth of non-fungible tokens to be bought at huge discounts on Jan. 24.
A user who goes by jpegdegenlove managed to acquire two Bored Apes, two Mutant Apes, one Cyberkongz Genesis and a Cool Cat for a total of 57.31 ETH ($137K).
Quite the feat, considering the cheapest Bored Ape NFT currently costs 93 ETH ($223K).
All six NFTs were subsequently sold for 390 ETH ($936K), netting a profit of over $700K.
Here’s how it happened.
Listing an NFT for sale on OpenSea is free.
Once a user approves a certain NFT collection for sale with a token approval, listings only require a signature. However, canceling a listing requires an on-chain transaction which costs gas fees.
In order to avoid paying the cancellation fee, intrepid NFT traders came up with a workaround of transferring the NFT to another wallet. Since the NFT was no longer in the original wallet, all listings pertaining to it would be rendered invalid and automatically removed from OpenSea’s website.
OpenSea stores listings and offers in an off-chain database in order to save users gas fees. This is why listings and offers only require a signature.
When an NFT with active listings is transferred, the listings disappear from the OpenSea website, but remain in the database. These listings remain active until their set expiration dates and can be accessed through OpenSea’s API. Rarible, a competing NFT marketplace, is another source of listing data.
If the NFT is subsequently transferred back into the original wallet, the old listings can be used to purchase the item.
And that’s exactly what happened, as we can see in the case of CyberKongz #155.
OpenSea seems to have since taken down jpegdegenlove’s account page.
Cancel Old Listings
If you’re active in the NFT market, you might want to go through your old listings and cancel any pertaining to NFTs you continue to hold. Rarible is a convenient place to check.
Stay safe out there!