Ornella Hernandez

<div id="highlights-block_633713150f67c" class="highlights">
 <ul>
 <li>NFT-collateralized lending has become a popular financing tool for blue chip NFT holders</li>
 <li>Sales of rare MAYC and Ape Punk NFTs prove Yuga Labs’ market dominance</li>
 </ul>
 
</div>



The NFT ecosystem has been waning in terms of monthly trade volumes since May’s crypto market downtown, and especially compared to all-time highs in January of this year.



However, this week in particular saw some significant trading activity, and Wednesday takes the cake for the highest daily volume of NFTs sales, measured in ether (ETH), in September and in the past 30 days.



Sept. 28 saw 12,565 ETH, or $16.6 million, transacted that day. While Sept. 20 recorded a lower volume amount in ETH — 12,549 ETH — the USD amount of $17 million was higher due to the fluctuating price of ether.&nbsp;&nbsp;&nbsp;



This week’s spike can likely be attributed to a $16.75 million generative art sale, a $1.3 million Mutant Ape Yacht Club (MAYC) lending deal and a $4.45 million CryptoPunks sale.



Tyler Hobbs, the creator of the popular Fidenza project on Art Blocks, and Archipelago co-founder Dandelion Wist released mint passes for their new collection, QQL, dropped via a Dutch auction on Wednesday.



This generative art experiment sold out 900 mint passes using a rebate mechanism so that all buyers ended up paying the same price once it settled. While the auction closed out at 14 ETH, the QQL project collected around 12,600 ETH, or approximately $16.7 million.



Claiming it “empowers the collector as co-creators,” QQL pass holders can use the algorithm to pick the output of the on-chain art they mint.



Many QQL collectors may already be collectors of other generative art pieces or of Hobbs’ Fidenzas, a collection that recently saw one holder <a href="https://twitter.com/ab_fidenza_bot/status/1572596400436776962?s=20&amp;t=yMCYpjAW36GG8j2ewHEj6A" target="_blank" rel="noreferrer noopener">scoop up</a> seven NFTs worth $912,741 within 24 hours.&nbsp;



The success of generative art NFTs has contributed to the growth of the NFT art sector, and the Art Blocks NFT platform is at the front of the pack thanks to collections such as Fidenza, Chromie Squiggles and Ringers, to name a few.&nbsp;



Art Blocks, which is approaching its two-year anniversary in November, is also known for its curated collections consisting of a series of projects that individual artists or collaborations can submit to.



Its eighth and latest series will also be the “last of its kind,” Art Blocks <a href="https://twitter.com/artblocks_io/status/1574488794958528512?s=20&amp;t=y0KQWVeitdvYJ0-F0eITSg" target="_blank" rel="noreferrer noopener">announced</a> this week. Any future curated projects won&#8217;t belong to a numbered series.



<h3 class="wp-block-heading">Mega Mutant Apes-collateralized loan</h3>



A mega NFT lending deal made a big bet on Mutant Ape Yacht Club NFTs.&nbsp;



Fragment — a company “creating rich stories and worlds for the metaverse,” according to its Twitter — took out a 1,000 ETH loan, worth about $1.3 million, via NFT lending platform Arcade on Tuesday to purchase Mega Noise, one of the rarest NFTs in the MAYC collection.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">1000 ETH was borrowed against two mega mutants today on <a href="https://twitter.com/arcade_xyz?ref_src=twsrc%5Etfw">@arcade_xyz</a>! The payback is set to be 1,044 ETH in 90 days (18% APY). Additionally the borrower (<a href="https://twitter.com/fragmentxyz?ref_src=twsrc%5Etfw">@fragmentxyz</a>) has bought a third mega mutant from <a href="https://twitter.com/machibigbrother?ref_src=twsrc%5Etfw">@machibigbrother</a> <a href="https://t.co/0dkWIVOGYo">pic.twitter.com/0dkWIVOGYo</a>&mdash; 0xTIGΞR (@PltTiger) <a href="https://twitter.com/PltTiger/status/1574818578083483648?ref_src=twsrc%5Etfw">September 27, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The collateral is two other Mega Mutant Apes — Mega Electric and Mega Swamp — that Fragment will lose if it does not repay the loan within 90 days.&nbsp;



Nexo served as originator of the loan, financing it through Arcade, while Meta 4 NFT Lending Fund sourced and structured it as the underwriter of the loan, assuming the liability in the event the borrower defaults.&nbsp;



“This type of activity is significant, not just because of the sticker-shock on the assets, but because it&#8217;s a really lovely example of tokenized finance — where we&#8217;re operating at the intersection of DeFi and NFTs,” Brandon Buchanan, Meta4’s founder and managing partner, told Blockworks.&nbsp;



“Deals like this come with a lot of complexity because you are valuing assets with little transaction history or comparables,” Buchanan added. “You want to be assured that custody solutions are safe, and need alternative forms of financing from sources that can tolerate the perceived risk.”



This purchase of Mega Noise ups Fragment’s Mega Mutant count to five NFTs. Only a dozen or so Mega Mutant Apes exist, spun off from Bored Ape Yacht Club using “mutant serum.”



<h3 class="wp-block-heading">Rare Ape CryptoPunk</h3>



Daniel Maegaard, also known as seedphgrase.eth, sold his rare Ape CryptoPunks NFT for 3,300 ETH, or $4.28 million, to an unknown buyer.



That makes it the highest ETH value sale for a non-alien punk in history. It is also the fourth-highest Punks sale of all time and second-highest sale in 2022 after another Ape Punk sold for 2,501 ETH, or $7.8 million, in February.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Punk 2924 bought for 3,300 ETH ($4,451,633.94 USD) by 0x9045de from 0x1da533. <a href="https://t.co/bh7Rjs9Aob">https://t.co/bh7Rjs9Aob</a> <a href="https://twitter.com/hashtag/cryptopunks?src=hash&amp;ref_src=twsrc%5Etfw">#cryptopunks</a> <a href="https://twitter.com/hashtag/ethereum?src=hash&amp;ref_src=twsrc%5Etfw">#ethereum</a> <a href="https://t.co/PT9v9bCC5s">pic.twitter.com/PT9v9bCC5s</a>&mdash; CryptoPunks Bot (@cryptopunksbot) <a href="https://twitter.com/cryptopunksbot/status/1575238937081221128?ref_src=twsrc%5Etfw">September 28, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



CryptoPunks is one of the OG NFT projects, and it continues to demonstrate massive interest and major sales, especially since its <a href="https://cms.blockworks.co/tiffany-co-turns-cryptopunks-into-12-5m-luxury-jewelry-sale/" target="_blank" rel="noreferrer noopener">$12.5 million luxury jewelry sale with Tiffany’s &amp; Co</a>.&nbsp;



CryptoPunks and MAYC collections operate under parent company Yuga Labs, which was valued $4 billion in March — the largest valuation of any NFT company to date.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Art Blocks

Mutant Ape Yacht Club, CryptoPunks Among This Week’s Record-breaking NFT Sales

Sebastian Sinclair

<div id="highlights-block_625dbcbbd85d4" class="highlights">
 <ul>
 <li>The wallet app is asking users to disable iCloud backups for MetaMask by going into Settings &gt; Profile &gt; iCloud &gt; Manage Storage &gt; Backups</li>
 <li>MetaMask&#8217;s response has drawn criticism from community members</li>
 </ul>
 
</div>



Crypto wallet MetaMask issued a warning advising users to disable their iCloud backups following an exploit of Apple&#8217;s service in an estimated $650,000 phishing scam.



The DeFi wallet provider said Sunday users who have iCloud enabled for iPhone application data were susceptible to hackers because the backups include their password-encrypted MetaMask vault.



&#8220;If your password isn’t strong enough and someone phishes your iCloud credentials, this can mean stolen funds,&#8221; MetaMask <a href="https://twitter.com/MetaMask/status/1515727239391809536" target="_blank" rel="noreferrer noopener">tweeted</a>.



The company did not immediately return a request for comment.



In one such phishing attack, hackers drained an estimated $650,000 from NFT investor Domenic Iacovone&#8217;s OpenSea account, including several Mutant Ape Yacht Club collectibles, on April 14.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Hey y’all, let’s see how amazing this community can be. My entire wallet was just stolen. Totally wiped out, MAYC 28478, MAYC 8952, MAYC 7536 Gutter cat 2280 , 2769, 2325 Also stole 100k in ape coin. Looking for all the help I can get. 100kreward <a href="https://twitter.com/BoredApeYC?ref_src=twsrc%5Etfw">@BoredApeYC</a> <a href="https://twitter.com/GutterCatGang?ref_src=twsrc%5Etfw">@GutterCatGang</a>&mdash; Domenic Iacovone (@revive_dom) <a href="https://twitter.com/revive_dom/status/1514751885126914051?ref_src=twsrc%5Etfw">April 14, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



&#8220;Got a phone call from Apple, literally from Apple (on my caller Id) called it back because I suspected fraud and it was an Apple number,&#8221; Iacovone <a href="https://twitter.com/revive_dom/status/1514752274471473152?s=20&amp;t=Mz55J5At86ofD9lN1ccoLA" target="_blank" rel="noreferrer noopener">tweeted</a>. &#8220;So I believed them, they asked for a code that was sent to my phone and two seconds later my entire MetaMask was wiped.&#8221;



MetaMask&#8217;s response has drawn criticism from community members who argue the backup feature used in iCloud should either be disabled or made tougher for hackers seeking a way into users&#8217; digital wallets.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">100% metamask will need to fix that shite <a href="https://t.co/M9E3DBt8p5">https://t.co/M9E3DBt8p5</a>&mdash; Br Br the podcast Snek (@bryanbrake) <a href="https://twitter.com/bryanbrake/status/1515767252292812801?ref_src=twsrc%5Etfw">April 17, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



MetaMask parent ConsenSys in February said it was looking to <a href="https://cms.blockworks.co/onboarding-the-next-wave-of-metamask-users-through-nfts/" target="_blank" rel="noreferrer noopener">leverage NFTs</a> (non-fungible tokens) as a means to onboard more users to its digital wallet while building out a white-label NFT platform.



While efforts are being made on that front, critics argue cases like Iacovone&#8217;s demonstrate ConsenSys&#8217; need to improve security if it aims to bring on the &#8220;next wave&#8221; of wallet users.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Domenic Iacovone

MetaMask Issues Warning Following $650K iCloud Phishing Scam

Morgan Chittum

<div id="highlights-block_61f0381868171" class="highlights">
 <ul>
 <li>The company said it’s working on improvements to mitigate risk, such as a new dashboard for its marketplace</li>
 <li>An OpenSea bug destroyed 42 NFTs last year </li>
 </ul>
 
</div>



OpenSea is reimbursing users who had their non-fungible tokens <a href="https://cms.blockworks.co/attackers-exploit-opensea-loophole-to-snatch-and-resell-rare-nfts/" target="_blank" rel="noreferrer noopener">snatched up and resold </a>for far below market value on Monday.



An OpenSea spokesperson told Blockworks in a statement that the company has been “actively reaching and reimbursing affected users,” and is taking the matter “incredibly seriously.” The spokesperson did not immediately specify exactly how much users have been reimbursed.



The company said it’s been quiet on the issue to avoid notifying “bad actors who could abuse it at scale” before patching the problem. It’s working on product improvements, including a new dashboard that shows all active listings, to address the issue.



At least three opportunists <a href="https://cms.blockworks.co/attackers-exploit-opensea-loophole-to-snatch-and-resell-rare-nfts/" target="_blank" rel="noreferrer noopener">exploited the OpenSea loophole</a> Monday, making away with over $1 million worth of ether in ensuing NFT sales, according to blockchain analytics firm Elliptic. One user, who goes by “<a href="https://opensea.io/jpegdegenlove" target="_blank" rel="noreferrer noopener">jpegdegenlove</a>” online, paid roughly $133,000 for seven NFTs, before flipping the digital collectibles on OpenSea for $934,000 of ether.



“The <a href="https://twitter.com/yakirrotem/status/1485559864948629512" target="_blank" rel="noreferrer noopener">exploit</a> appears to originate from the ability to re-list an NFT at a new price, without canceling the previous listing,” Elliptic said in a <a href="https://www.elliptic.co/blog/bug-allows-nfts-worth-over-1-million-to-be-stolen" target="_blank" rel="noreferrer noopener">report.</a> “Those previous listings are now being used to purchase NFTs at prices specified at some point in the past — which is often well below current market prices.”



The loophole, according to the company, was not an exploit or a bug, but rather a UI issue that arises when a user creates a listing, then transfers the NFT to a different wallet — typically to avoid the gas fee that comes with nixing a listing.&nbsp;



Additionally, the platform is changing the default listing duration for NFTs from six months to one month, so that if an NFT is transferred back into a wallet after the new time frame the listing will have expired.&nbsp;



OpenSea reportedly <a href="https://twitter.com/nicksdjohnson/status/1435381880484859906?s=20" target="_blank" rel="noreferrer noopener">had a bug</a> in its marketplace that destroyed 42 NFTs last year, but was fixed within a day.&nbsp;



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Bored Ape Yacht Club

OpenSea is Reimbursing Users After Loophole Led to Steep NFT Losses

<div id="highlights-block_61ef2e85f59f9" class="highlights">
 <ul>
 <li>Coding bug enabled attackers to buy NFTs at previous sale prices and flip them for substantial profit</li>
 <li>At least three attackers exploited users, according to blockchain analytics firm Elliptic</li>
 </ul>
 
</div>



A bug in the OpenSea NFT marketplace has enabled hackers to snatch up rare NFTs from owners for far below market value and resell them for hefty profits.&nbsp;



At least three attackers exploited a bug on the marketplace, making away with over $1 million as of Monday, according to blockchain analytics firm Elliptic. One of the alleged opportunists bought a Mutant Ape Yacht Club NFT for $10,600 worth of ether, selling it hours later for $34,800 worth of ether.



“The <a href="https://twitter.com/yakirrotem/status/1485559864948629512" target="_blank" rel="noreferrer noopener">exploit</a> appears to originate from the ability to re-list an NFT at a new price, without canceling the previous listing,” Elliptic said in a <a href="https://www.elliptic.co/blog/bug-allows-nfts-worth-over-1-million-to-be-stolen" target="_blank" rel="noreferrer noopener">report.</a> “Those previous listings are now being used to purchase NFTs at prices specified at some point in the past — which is often well below current market prices.”



One attacker, who goes by “<a href="https://opensea.io/jpegdegenlove" target="_blank" rel="noreferrer noopener">jpegdegenlove</a>” online, paid roughly $133,000 for seven NFTs before quickly flipping them on the platform for $934,000 worth of ether.&nbsp;



Suspicious activity picked up over the past day but the bug has been present for weeks and was flagged in a Jan. 1 <a href="https://twitter.com/carsonturner/status/1477414895834513413?s=20" target="_blank" rel="noreferrer noopener">tweet</a>. The marketplace was exploited over eight times in a roughly eight-hour-span on Monday morning. A <a href="https://etherscan.io/address/0xb1a22cc48f6784f629a994917cd6474923630c48" target="_blank" rel="noreferrer noopener">wallet address</a> associated with multiple purchases has made a total profit of $878,288 worth of ether from the exploit, according to blockchain analytics provider <a href="https://pro.nansen.ai/nft-wallet-profiler?address=0xb1A22cc48f6784F629A994917cD6474923630C48" target="_blank" rel="noreferrer noopener">Nansen</a>.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The fact that a user could buy at previous prices and flip NFTs without any form of verification points to the centralization issue in NFTs as they stand right now,” Jenna Pilgrim, CEO of blockchain media licensing startup Streambed, told Blockworks. </blockquote>



“OpenSea does a great job at creating a solid user interface, but unfortunately does so at the cost of security,” she added.&nbsp;



In a turn of events, “jpegdegenlove” later compensated two of their victims, transferring them a combined total of $75,000 worth of ether, according to Elliptic.&nbsp;



Charles Guillemet, CTO of hardware wallet developer Ledger, said that it is currently not safe for NFT holders to have their assets listed on OpenSea. “It’s very difficult to use this platform securely right now,” he said on a Twitter space Monday. “The only thing we can do is to mitigate the risk.”



OpenSea has yet to publicly address the exploit and did not immediately respond to Blockworks’ request for comment on the matter.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Mutant Ape Yacht Club

Newsletter

Blockworks Research