Crypto Collectibles

NFT investor accidentally burns $135K CryptoPunk trying to borrow money

While going through the unfamiliar process of wrapping NFTs, Riley accidentally sent the asset to a burn address, permanently deleting the NFT from circulation.

A nonfungible token (NFT) from the CryptoPunks collection worth 77 Ether (ETH) was sent to a burn address to be permanently destroyed. However, the collector intended to borrow some money against it to buy another NFT.

NFT collector Brandon Riley added CryptoPunk #685 to his collection on March 13 by paying 77 ETH, hoping to hold it for the long term.

As a seasoned investor, Riley knew the importance of procuring new NFTs right before crypto markets took off into a new bull market. As a result, he decided to borrow some money against CryptoPunk #685 by using a popular technique known as wrapping.

While going through the unfamiliar process of wrapping NFTs, Riley accidentally sent the asset to a burn address — which permanently deleted the NFT from circulation, as shown below.

Trading history of CryptoPunk $#685. Source: dappradar.com

“I was told to follow the directions exactly, so I did,” explained Riley, but in the process, he ended up losing 77 ETH, which was worth $135,372.16. He explained:

“I was not wrapping this punk to sell it on Blur. It was to be my “forever punk.” The number is exact reverse of my ape. I was only wrapping it because I needed to borrow some liquidity from it.”

While members of Crypto Twitter believed that the NFT collector must have had “deep pockets,” Riley contradicted the rumors by revealing that he had purchased CryptoPunk #685 through borrowed money.

“I just shouldn’t have attempted this on my own, I guess,” was Riley’s takeaway from the experience. On the other hand, Crypto Twitter also blamed confusing user interfaces and complex instructions for the investor’s loss. As a result, the community unanimously agreed on the need to revamp the front-end processes for crypto ecosystems.

Related: Improving Bitcoin NFT marketplace infrastructure sets the stage for ecosystem growth

NFT wash trading increased by 126% in February, confirmed a CoinGecko report. The top six NFT marketplaces are Magic Eden, OpenSea, Blur, X2Y2, CryptoPunks and LooksRare. X2Y2, Blur and LooksRare saw a rise in wash trading for the fourth straight month, with a total volume of $580 million.

NFT wash trading volume, January 2022–February 2023. Source: CoinGecko, Footprint Analytics

As Cointelegraph previously reported, the issue of wash trading stems from a lack of clear regulations.

Magazine: 4 out of 10 NFT sales are fake: Learn to spot the signs of wash trading

Yuga Labs accused of IP theft for trademarking BAYC wolf skull logo

NFTs were introduced to the world to help solve the illegal use of intellectual property and protect artists — the very thing Yuga Labs has been accused of doing.

The iconic wolf skull logo of Bored Ape Yacht Club (BAYC), Yuga Labs’ premier nonfungible token (NFT) collection, was allegedly illegally trademarked without proper licenses. The image was originally released by a company specializing in drawing tutorials for children and beginners.

NFTs were introduced to the world to help solve the illegal use of intellectual properties and protect artists — the very problem Yuga Labs has been accused of doing. Crypto Twitter member and NFT artist @Jdotcolombo came across a post from April 5, 2021, in which Easy Drawing Guides advertised “an easy step-by-step drawing tutorial” for a wolf skull.

Website showing time stamp of the art’s release. Source: EasyDrawingGuides.com

The art displayed by the company closely resembled BAYC’s official logo, which initially raised suspicion of wrongdoing, considering that BAYC’s Kennel Club collectibles launched on June 17, 2021.

Easy Drawing Guides responded to the commotion to confirm that Yuga Labs had no license to use the wolf skull drawing. Taking things one step further, Yuga Labs trademarked the unlicensed logo as its own. In response, Easy Drawing Guides stated:

“The intellectual property rights for the drawing belong to Easy Drawing Guides as it’s our original drawing and protected by our Terms and Conditions.”

Cointelegraph confirmed that the terms and conditions of Easy Drawing Guides grant a non-transferable, non-exclusive, revocable, limited license to use and access the website solely for personal, non-commercial use.

On the one hand, BAYC supporters believe that no intellectual property was breached in using the logo; however, most agree that Easy Drawing Guides is entitled to some serious compensation.

Yuga Labs has not yet responded to Cointelegraph’s request for comment.

Related: Yuga Labs settles lawsuit with developer involved in copycat BAYCs

The intellectual property dilemma is not new for Yuga Labs. One of the founders of the BAYC copycat NFT collection RR/BAYC filed an opposition notice against 10 trademark applications from Yuga Labs.

Opposition example. Source: USPTO

In the notice, RR/BAYC co-founder Jeremy Cahen highlighted a list of “grounds for opposition” against Yuga Labs’ filings, claiming that the company “abandoned any rights” to certain logo and artwork designs due to BAYC NFT sales granting “all rights” of the digital images to the owners.

A beginner’s guide to NBA Top Shot NFTs

The collective sales volume of NBA Top Shot NFTs has dropped 99% from its February 2021 peak.

NBA Top Shot is a nonfungible token (NFT) marketplace that enables basketball fans to buy, sell and trade NBA-themed digital collectibles.

These collectibles are “Moments” — NFTs of NBA video clips and digital art — available per their degree of rarity. In other words, users can trade NFTs that feature anything from a winning three-pointe from Luka Dončić to a dunk from Lebron James, depending on their availability.

A NBA Top Shot Moment listing example. Source: Official Website

The concept is akin to traditional sports collectible where fans attempt to acquire the rarest of items associated with teams, with an aim to either collect or sell it later at a higher price. Except, in the case of NFTs, these collectibles are digital — unique cryptographic tokens that exist on a blockchain and theoretically cannot be replicated.

How does NBA Top Shot work?

NBA Top Shot is officially licensed by the NBA, the NBA Players Association, and Dapper Labs. The marketplace runs on the FLOW blockchain, which Dapper Labs built as a developer-friendly ledger to support “the next generation of games, apps, and digital assets.”

As explained above, the NBA Top Shot platform functions like trading cards. It starts with the NBA licensing its reels and digital art to Dapper Labs. In turn, Dapper Labs uses the footage to create Moments as NFTs.

Each Moment has a unique serial number attached to it, which guarantees its authenticity and shows its rarity. In addition, the Dapper Labs team creates only a limited number of NFTs to ensure scarcity. As a result, the commonly available Moments are cheaper in valuation than the rarer ones. The NBA Top Shot website explains that: 

An NFT is a one-of-a-kind, non-fungible, cryptographic token representing a unique digital asset for which there is no copy or substitute. An NFT cannot be substituted for another NFT as each NFT is distinctive and unique in some way. An NFT is not a medium of exchange and is not convertible virtual currency.

Each moment is secured by the blockchain, meaning your Moment is Unique and Licensed by the NBA and NBPA.

Moments come as a part of “Packs,” similar to how traditional sports cards come in a bundle. In turn, packs are a part of the so-called “Series,” which gets launched concurrently with the NBA season. So, fans can collect new packs of NFT moments that feature the season’s best highlights.

In addition, fans can collect Moments from the past depending on their availability. For example, they can get Magic Johnson’s dunk from May 16, 1980.

NBA Packs and Moments

Collecting NBA Top Shot Moments is not a straightforward task. Typically, users do not know what Moments they will receive when they go ahead with a purchase, given the availability of each NFT depends on the the kind of set or Pack it comes from.

NBA Top Shot features four types of Moments: Common, Fandom, Rare, and Legendary. There is also a fifth category, called Ultimate, but this Moment is attainable only via auction. Anyway, here’s how the other four categories work:

  • Legendary Moments: comprise 0.09% of the total available Moments, which makes them extremely rare and tough to acquire. Naturally, Legendary Moments are more expensive than most of their counterparts. 
  • Rare Moments: comprise 1.6% of the total Moments and typically feature historical plays from NBA legends.
  • Fandom Moments: availability is not fixed since Dapper Labs create them based on special experiences associated with specific events. For instance, the firm can make Moments available in real time to only those users who were available in the arena.
  • Common Moments: comprise 95.8% of the total Moments, meaning they are easily available and cheaper than other categorie.
NBA’s Moments categorized based on their rarity. Source: Official Website

Dapper Labs groups the top shot Moments into Packs and presents them as Sets. These Sets come in two distinctive categories: Base and Non-Base. Here’s how they work:

  • Base Sets: These packs fall in Common rarity category and are released in order of Series and release, i.e., Series 1 had 12 releases. They contain three basic Moments and are ideal for users who are just starting their NBA Top Shot collection.
  • Non-Base Sets: Unlike Base Sets, Non-Base Sets come in variations and contain at least one Common Moment in addition to a Rare or Legendary Moment. That makes the sets costlier.
Illustration of NBA Top Shot Sets. Source: Official Website

NBA Top Shot Challenges and Quests

Challenges and Quests serve as a parallel avenue from where NBA Top Shot users can receive Moments, but as rewards not sales.

Related: DeFi, NFT, blockchain games: Key takeaways from DappRadar’s 2022 review

For instance, Challenges grant rewards to users who fulfil a given task in a specific timeframe. In detail, NBA Top Shot can launch a challenge with directives to collect a particular number of Moments in specific hours or days. Users who complete the challenge receive a freshly minted Moment.

Similarly, Quests offer rewards to users for finishing tasks, except the tasks are like scavenger hunts, wherein users are told to locate and build an exhibit for Moments with certain characteristics. As a result, Quests appear to be more difficult than Challenges and, therefore, return greater rewards.

A word of caution

The demand for NBA Top Shot exploded in 2021 with its sales volume reaching a pick around $224 million in sales volume from over 80,820 unique buyers in February. By November 2022, the sales volume had declined to about $2 million from some 10,000 unique buyers.

NBA Top Shot sales volume throughout the history. Source: CryptoSlam

The crash in demand came in line with similar drops across the NFT space with many leading projects, including Bored Ape Yacht Club and CryptoPunks, witnessing lower demand. As a result, some analysts rubbished the NFT market altogether, calling it a bubble.

As a result, venturing into NBA Top Shot space to speculate on its Moments remains a risky proposition and potential collectors should never invest more money than they can afford to lose. 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Yuga Labs acquires Beeple’s 10KTF game, hints at metaverse integration

Once the acquisition is completed, the company said that Beeple will be hired as an advisor for Yuga Labs.

Yuga Labs, creators of Bored Ape Yacht Club (BAYC), has acquired 10KTF — the nonfungible token (NFT) game founded by digital artist Michael Winkelmann, also known as Beeple.

10KTF is a browser-based NFT game that allows players to outfit heroes with crafted items and load-outs in order to complete missions. Missions reward players with APE coins, badges, materials and free airdrops.

The game also intends to include many items that could be worn by an avatar in the future; pairs of socks and backpacks are popular items from the game’s collection. Until now, fans have been left to wonder what Metaverse platform will feature these items. Now that the acquisition has been announced, some fans have begun to speculate that 10KTF items may become wearable within Yuga Labs’ as-yet-unreleased Otherside metaverse ecosystem.

A thread published on the 10KTF official Twitter channel on Nov. 14 showed images of the 10KTF hero, Wagmi-San, drinking an elixir that was previously featured in the Otherside trailer. The final post in the thread is a retweet from the Otherside’s channel, which says “welcome to the Otherside, Wagmi-San.”

Once the acquisition is completed, the company said that Beeple will be hired as an adviser for Yuga Labs.

Back in March, YugaLabs announced that it was acquiring both the Cryptopunks and Meebits NFT collections from the nonfungible pioneers at Larval Labs. At the time, Larval Labs co-founders Matt Hall and John Watkinson said that, though they were not joining Yuga as part of the deal, “we saw in [Yuga Labs] the skill set and expertise in this space that we were missing.”

New tool mirrors Optimism NFTs to Ethereum mainnet for use in verified apps

NFTs from Layer 2 were not previously recognizable to apps like Twitter.

Optimism developers jvmi and Kelvin Fichter released a new app called Magic Mirror on Nov. 9 that allows NFT holders to copy or “mirror” their Optimism NFTs to the Ethereum mainnet. NFT holders can now use their Optimism NFTs in a variety of verified apps, such as in Twitter’s profile badge system — where previously, only NFTs native to Ethereum Layer 1 could be used.

Twitter introduced its NFT badge feature in January, allowing NFT holders to verify ownership of their art. Verified NFTs can be used as a profile pic on Twitter, where they are then denoted with a special, hexagonal shape. Prior to Magic Mirror’s release, holders of NFTs from other networks, like Optimism, Polygon, or Avalanche, did not have the ability to do this.

The company said that this new tool is an attempt to solve this problem, albeit only for holders of Optimism NFTs. Users can switch out the NFT that is inside wach mirror anytime they want, rather than minting a new one each time. However, only one Optimism NFT can be put inside the mirror at a time.

Magic Mirror is part of a renewed push by Optimism to win the battle between Ethereum scaling solutions. In June, a version of balancer was released on the Optimism platform, and in September, 1Inch users on Optimism received a 300K token airdrop to incentivize use of the network.

Trademarks filed for NFTs, metaverse and cryptocurrencies soar to new levels in 2022

Trademark applications filed for NFTs alone grew from a total of 2,142 filed for 2021 to 6,855 by the end of October 2022.

The number of companies filing trademarks for nonfungible tokens (NFTs), metaverse-related virtual goods and services, and cryptocurrencies has grown rapidly in 2022. 

According to data compiled by licensed trademark attorney Mike Kondoudis, the number of trademark applications filed for digital currencies, as well as their related goods and services, has reached 4,708 as of the end of October 2022 — surpassing the total number filed in 2021 (3,547).

The number of trademark applications filed for the metaverse and its related virtual goods and services also soared to 4,997 from the 1,890 filed in 2021. This seems to suggest a massive appetite for the metaverse and its related products, despite the setbacks the ecosystem has faced in becoming fully functional.

The desire for NFTs as a technology still appears to be on the rise, despite a recorded decline in NFT trading volume and sales. According to Kondoudis’ statistics, the total number of trademark applications for NFTs and their related products increased from 2,142 in 2021 to 6,855 as of October 2022.

Related: What remains in the NFT market now that the dust has settled?

Within the past month, a number of companies have filed fresh trademark applications to join the Web3 ecosystem. On Oct. 21, makeup and cosmetic giant Ulta filed a trademark application for plans to include NFTs and virtual makeup and salon services among its offerings.

Luxury watchmaker Rolex also filed a trademark application with plans to bring NFTs, NFT-backed media, NFT marketplaces and a cryptocurrency exchange to its empire.

NFT project Azuki launches Physical Backed Token

The company said that the open-source token standard intends to tie a physical item to a digital token on the Ethereum blockchain.

Anime-inspired nonfungible token (NFT) project Azuki has released the Physical Backed Token (PBT) — an open-source token standard that ties a physical item to a digital token on the Ethereum blockchain.  

Azuki shared on its Twitter account that the first implementation of the PBT will use the BEAN Chip, or a physical cryptographic chip that self-generates an asymmetric key pair. The combination of the PBT and the BEAN Chip introduces a feature that the project is calling “scan to own.”

According to the information shared by the Azuki team:

“Scanning the chip with your phone allows for the PBT to be minted or digitally transferred to the owner’s wallet. This allows the current owner of a physical item to also own the PBT, which verifiably authenticates the item and ties the item to a digital token in the wallet of their choosing.”

The PBT intends to enable decentralized authentication and tracking of the full ownership lineage of physical items, all completely on-chain and without a centralized server, making it a trustless authentication. According to Azuki, no entity will have the singular right to authenticate or verify ownership of items. Everyone is free to authenticate, verify and build experiences on top of this technology.

Azuki believes that PBTs will unlock the use of physical goods to create digital experiences thereby creating a new generation of storytelling and experiences. According to the project, holders can build a collection that captures both the digital and physical, trade authenticated items or participate in real-life quests.

Related: Azuki Founder Under Fire, CryptoPunk sells for a major loss and more

Azuki’s announcement of the PBT was received with mixed reactions on Crypto Twitter. Not all crypto enthusiasts were impressed, some suggested that the technology wasn’t necessarily new. Twitter user W3Meysam shared:

Since the news of Azuki’s launch of a Physical Backed Token, the project has become number one on OpenSea’s 24-hour trading volume rankings.

Academy Award winner Anthony Hopkins sells out NFT collection in minutes

The collection features 1,000 original cinematic art pieces inspired by the actor’s award-winning career.

Oscar award-winning actor Sir Anthony Hopkins has sold out his debut NFT collection The Eternal Collection in under 10 minutes. 

The collection, created in partnership with Orange Comet, Inc., an NFT and Web3-focused design agency, features 1,000 original cinematic art pieces inspired by different performances from the actor’s long career.

According to Orange Comet, the body of work “conceptualizes an interpretation of the vast character archetypes Sir Anthony Hopkins has portrayed over his illustrious film career drawing its potent energy from his stimulating body of art.”

The creative visuals and animations with titles like The Jester, The Lover, The Ruler, The Rebel, The Giver and The Eternal each represent various archetypal characters played throughout the Hollywood actor’s career.

Orange Comet alleged that the collection’s sellout was the fastest in OpenSea’s history, though Cointelegraph was unable to confirm the claim prior to publication.

The celebrated actor thanked the NFT community in a tweet stating that he still couldn’t believe the news of the collection’s sell-out.

The 1,000 one-of-one NFT images come with randomly selected utilities ranging from receiving autographed art books featuring the actor’s paintings and drawings, to getting the opportunity to engage in a conversation with Anthony Hopkins via Zoom, to random selections of personalized NFTs with a message from Hopkins airdropped into the buyers’ wallets.

Formula One files ‘F1’ trademarks covering crypto, NFTs and Metaverse

The racing competition has plans to set up an online marketplace for cryptocurrency, meta tokens, digital collectibles, crypto-collectibles and NFTs.

Formula One is looking to establish itself within the Web3 ecosystem with eight recently filed trademarks for its globally recognized “F1” abbreviation.

According to licensed trademark attorney Mike Kondoudis, the race-car league filed eight trademark applications on Oct. 5 covering cryptocurrency, nonfungible tokens (NFTs), crypto marketplaces, retail stores for virtual goods, cryptocurrency trading and mining, and blockchain financial transactions.

The filed trademarks suggest that F1 has plans to play an active role in the emerging Web3 ecosystem with its trademark covering software for use with cryptocurrency, meta tokens, digital collectibles and NFTs, as well as software for digital currency payment and exchange transactions.

Beyond software, Formula One also plans to offer retail store services in virtual goods, as well as provide an online marketplace for buyers and sellers of cryptocurrencies and NFTs.

According to the trademark filed, F1 will also dabble in financial transactions via blockchain technology by providing a digital currency or digital token. The scope of the trademark also extends to entertainment services using virtual goods, namely downloadable artwork, cryptocurrency, digital collectibles, crypto-collectibles and NFTs for use in online, virtual, augmented and mixed-reality environments.

In August, Cointelegraph reported that F1’s trademark department registered two new trademark filings with the United States Patent and Trademark Office for the Las Vegas Strip Circuit, where the company’s brand and logo were going to be listed on a wide range of goods and services during next year’s race.

Related: Web3 must bridge back into Web2 for real cash flows — Checkout.com VP

F1 is among several major brands to seek exposure to the Web3 economy, which is still in its nascent stages. Asset managers have also recognized the potential, with exchange-traded fund (ETF) issuer Bitwise recently launching a Web3 ETF for institutional and retail investors.

OpenSea to allow users to submit bulk NFT listings and purchases

The company said that users can now list and buy up to 30 items in a single flow.

OpenSea, a digital marketplace for crypto collectibles and nonfungible tokens (NFTs), announced in a series of tweets on Oct. 5 that the platform will officially allow its users to bulk list and bulk purchase up to 30 digital collectible items in a single flow. 

In the case of bulk buying, the platform will allow its users to add up to 30 items from the same chain to their cart before finalizing their purchases in a single transaction, reducing costs associated with gas fees and allowing the process to be more convenient and streamlined. The company explained:

“In your collected items tab you can access bulk listings by clicking on the ‘+’ symbol when you hover over an item card or by clicking ‘list for sale’ in the ‘More Options’ drop-down. You’ll then be able to select up to 30 items to list at once.”

In September, Cointelegraph reported that OpenSea had launched a new immersive initiative enabling creators to launch their NFT collections on their own customizable and dedicated drop pages, with hopes that this will allow for greater visibility and discoverability on the marketplace’s new homepage.

In the same month, global music and entertainment company Warner Music Group announced a partnership with the NFT marketplace to provide a platform for select musical artists to build and extend their music fanbase into the Web3 community.

Innovations to the platform have come during a time when OpenSea’s volume has plummeted drastically, with massive declines in the daily and monthly transactions on the platform. The marketplace went from processing $405.75 million in transactions on May 1 to only processing $5 million worth of NFT transactions on Aug. 28.