🥛 The largest NFT sell-off of all time

  • February 27, 2023
  • 4 Min Read

GM, this is the Milk Road. We’re the Geico of crypto - 3 minutes can save you 100% or more on time wasted reading irrelevant news.

Here’s what you missed over the weekend:

  • The largest NFT sell-off of all time
  • Crypto companies team up to hack a hacker
  • NFT traders have a new worry: IP infringement

WHALE SELLS 1,000+ NFTS

The largest NFT sell-off of all time happened over the weekend. And there was nowhere to hide - even the top collections like BAYC, Azuki, etc., all sank in price.

It all started when Jeffrey Huang (aka “Machi Big Brother”), a well-known crypto whale, sold off 1,000+ NFTs. 

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In the span of 48 hours, 1,010 NFTs were sold for $18.6M. According to an analyst from Nansen, most of them were top-tier collections too, including:

  • 308 Otherdeed for 582 ETH (~$955k)
  • 191 MAYC for 3091 ETH (~$5.1M)
  • 112 Azuki for 1644 ETH (~$2.7M)
  • 90 BAYC for 5707 ETH (~$9.4M)

The massive sell-off caused fear, uncertainty, and doubt to spread across the NFT industry. FUD are the only three letters that terrorize crypto investors more than SBF.

As a result, 21 of the top 25 NFT collections dropped in price on Saturday night. Most floor prices fell ~10% as the panic began to spread.

But it’s important to note that there might be a method to Machi’s madness…. Rewards farming. Machi is one of the biggest users of Blur, an NFT marketplace that gives out token rewards to users based on trading volumes. And earlier this month, Blur rolled out its first token airdrop. 

Blur gave out hundreds of millions of dollars worth of tokens to its early users. Machi was one of the biggest recipients - he received 1M BLUR tokens worth $1.3M+. (Many speculate that Machi and others use Blur to wash trade and farm rewards.)

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And now, Machi could be back for more. Last week, Blur announced that its second airdrop is coming soon. 

So buckle up, it won’t be the last time we see major volatility in the NFT markets. Can’t hate the players, hate the game.

THE TAX TOOL BUILT FOR WEB3 BY AWAKEN

Last year it took me 3 full days to file my crypto taxes, and I still think I paid the wrong amount to the IRS. 

It was a nightmare.

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  • Awaken is 10x more accurate. They have best-in-class support for 25,000 tokens, NFTs, wallet transfers, liquidity providing, staking, bridging, and much more. It’s the only DIY software that captures all of your transactions and calculates the cost basis correctly. 
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  • Awaken is 10x easier to use. Crypto taxes can be complicated, but Awaken’s user-friendly interface is simple and clean.

It’s a fully anonymous product. You sign up with your email and that’s it. If they ever ask you to connect a wallet or a seed phrase we’ll smack the s*** out of them. 

They’re offering $50 of free credits to the first 200 users who sign up:

CLAIM UP TO $50 ON AWAKEN NOW

CRYPTO COMPANIES TEAM UP TO HACK A HACKER

One of the craziest things in crypto happened last week… It includes a court order, hackers getting hacked, and a trick that recovered hundreds of millions of dollars in stolen funds. 

Ladies & gents, get ya popcorn ready…. This is how Jump Crypto & Oasis teamed up to steal back $225M from the Wormhole hacker.

  • One year ago, Wormhole (a token bridge) got hacked for $325M+. The funds have moved a few times and most recently sat in an Oasis crypto wallet
  • Earlier this month, the High Court of England and Wales ordered Oasis to “take all necessary steps” to recover the stolen assets
  • Oasis teamed up with Jump Crypto (Wormhole’s parent company) and a group of white hat hackers to plan it out. The white hat (aka ethical) hackers pointed out that Oasis could upgrade its smart contract and exploit it through a vulnerability.
  • Oasis made the suggested upgrade and successfully recovered $225M in stolen funds. TLDR - the upgrade “tricked” the smart contract into transferring the stolen funds to a new wallet controlled by Jump. (For a deep dive into how the “counter-exploit” actually worked, check out Blockworks analysis here)

Basically, a crypto company hacked itself in order to steal funds back from another hacker. Crazy, right? All that’s missing is Tom Cruise.

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But while some were applauding the covert operation, others highlighted how this could be bad for crypto. If all it takes is a court order to make upgrades & change smart contracts in order to take funds from an account, it puts into question how “decentralized” some of these DeFi protocols really are.

Sure, the Wormhole hack was bad for DeFi, but this counter-exploit could potentially be worse by setting a new precedent. And it caused a major debate on Twitter. 

Here are some of the best takes:

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A NEW PROBLEM NFT HOLDERS NEED TO KNOW ABOUT: IP INFRINGEMENT

Being an NFT investor can be tough. You gotta fight off the 4 Horsemen of NFTs: scams, rugpulls, hacks, and family members that make fun of your JPEG collection on a daily basis.

And now there’s one more thing to add to the list: IP infringement. And that’s all thanks to the recent Hermes v MetaBirkins NFT case. The luxury brand just won a case against an NFT project for using its IP.

Now investors need to keep an eye on whether collections are misusing trademarks or IP from other major brands. It can be tedious & time-consuming - two things we hate here at Milk Road. 

Fortunately, one of our partners has a tool that can do it for you… bitsCrunch’s NFT Forgery Detection. It’s an AI-powered API that detects counterfeit NFTs and forged logos in existing NFTs. And it can help prevent users from investing in the next MetaBirkins.

The tool was recently used to find another questionable NFT collection - Coodles. NFT Forgery Detection found that Coodles displays the logo of a restaurant we all know & have stumbled into at 2am drunk at least once…. 

Yup, McDonalds. The trait is called “McDoodles” and it’s on ~5% of the entire CoodlesNFT collection…

Did the multi-billion dollar fast-food giant partner up with a tiny NFT collection to launch McDonalds sweatshirts? Highly unlikely. But that hasn’t stopped Coodles from doing ~$5.5M (3,370 ETH) in total sales volume. 

Who knows if McDonalds will take legal action against Coodles but, as an investor, it’s better to be safe than sorry.

MILKY MEME

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That's a wrap for today. Stay thirsty & see ya next time! If you want more, be sure to follow our Twitter (@MilkRoadDaily)

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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    This dashing dairy expert is not just your average milkman. He's a tri-athlete, a former classmate of Satoshi Nakamoto, and a crypto enthusiast who loves nothing more than delivering the freshest news and insights straight to your inbox.