Last week, a similar incident occured when another NFT project, called the Stoner Cats mini-series resultet in users losing $790,000 in failed Ethereum transactions.
In a recent NFT drop on the Ethereum Network, hundreds of users lost around 174 ETH while fiercely causing congestion on the Network. The new collections of Non-fungible tokens (NFTs) called “COVIDPunks” exhibited several low-resolution COVID conscious punks with a mask on.
The recent NFT drop that sold 10,000 COVIDPunks within a few minutes ended up causing a huge commotion on the network. Due to the obstruction on the network, a huge amount of money used in gas(transaction) fees has been lost.
The total money lost in this event has been estimated at $490,000. According to Stockhead, 626 users lost more than $1000 in gas fees. One user paid about $6,400 to mint COVIDPunks from the NFTs collection, but the transaction failed. This particular user paid a fee of 0.6 ETH to mint 16 COVIDPunks, followed by an additional charge of 1.7 ETH to enable a smooth transaction.
The COVIDPunks are randomly assigned medically masked, low-resolution avatars that are cryptographically unique. Just like any NFT on the Blockchain Network, they act as a digital guarantee of possession and validity. The COVIDPunks had raised quite a following and had become highly sought-after by some of the NFT collectors. Due to its demand, even the cheapest Punk was available at no less than $100,000 in Ethereum.
The hustle for COVIDPunks began at 5 pm on 5 August. Approximately an hour later, almost all the 10,000 NFTs went out of stock. Ethereum has recently generated a new upgrade called ‘London’ on the system, which allows the burning of ETH tokens after a transaction is completed. Due to the massive sale of the COVIDPunks, it became the largest ‘ETH Burner’, and the reason for the annihilation of 525ETH (about $1.5Mn).
The NFT drop also increased the burn rate up to 14ETH($40,000) per minute, with the emission rate falling to -4.7 ETH per minute. Since more ETH tokens were being destroyed than being regenerated, the total supply of the tokens was depleting during the one-hour sale.
The COVIDPunks project team acknowledged the reports on major losses suffered by the collectors. In a statement on Discord, they claimed to be working on the problem currently, and have assured users of a solution soon. Since the gas fee is not refundable on Ethereum, it is uncertain how the team decides to tackle the situation.
Last week, an event on another NFT project, called the Stoner Cats mini-series, met a similar fate. The NFT sale ended in users losing $790,000 in failed Ethereum transactions.
Sanaa is a chemistry major and a Blockchain enthusiast. As a science student, her research skills enable her to understand the intricacies of Financial Markets. She believes that Blockchain technology has the potential to revolutionize every industry in the world.