Web3 is Going Just Great

So anyway, that's exactly what happened. NFTPerp announced that they would be sunsetting their popular beta project after accruing bad debt.

How they're going about it has been controversial among the successful traders on the platform: essentially, those who were in profit will lose their unrealized gains, while those who had lost money in their trades will have their losses waived. "Nftperp stealing profits from winner [unrealized profit and loss] to backstop losers UPNL is insane to me", wrote one commenter. Another wrote, "If anyone else is considering NFT perps, please have the 'what happens when the illiquid market goes to zero overnight' plans clearly in place from the beginning."

Not to be deterred, the team is already preparing to launch a "v2". May it go as well as their first attempt.

However, shortly after the DAO was created, the governance token was exploited. Attackers were able to take advantage of a flaw in the smart contract, with two exploiters stealing around 35 ETH (~$69,000). The DAO paused the contract to prevent further thefts.

File this one under "adding insult to injury".

Now, it's happened again, and some reports are throwing around even more massive numbers like $42 billion. In reality, the exploiters were able to mint massive quantities of tokens on multiple networks, with their wallet balances showing numbers in the billions. However, complete lack of liquidity for these tokens meant their "billions" are worth substantially less.

According to crypto research firm Beosin, the attackers have so far cashed out around 5,196 ETH (~$10.1 million) in liquid assets. Poly Network suspended services shortly after the attack.

According to Phillips, it took months before he was able to get in touch with Huobi and convince them to act on the leak. Phillips first notified Huobi of the leak in June 2022, and after repeated efforts to contact the company, the credentials were only revoked in June 2023.

Huobi has tried to downplay the hack, first stating that the user data leak was "on a small scale (4,960 individuals)" and "does not involve sensitive information and does not affect user accounts and fund security". They also claimed the leaked OTC data was test data. "The log shows that only [Phillips] has downloaded, and [Phillips] has also stated that he has deleted. Therefore no leakage is actually caused," they wrote.

According to CoinGecko, Huobi is the seventeenth-largest cryptocurrency exchange by volume.

The mint itself was plagued with issues, with many collectors complaining they weren't able to buy NFTs due to technical difficulties. A team member apologized for the issues, writing that they were "gutted over what happened" but that "we have an amazing reveal experienced planned that will kick off soon".

When the reveal happened, people were disappointed to say the least. They expected a unique look that would not "dilute" the value of the original Azuki collection, and were met with what many feel is a low-effort clone of the original Azukis. Some observed NFTs in the Elementals collection that appeared to be direct duplicates of ones in the original collection, which Azuki later wrote was a "technical glitch" that was quickly corrected. The floor price of the Elemental NFTs, as well as those of other Azuki projects, immediately suffered. While people paid 2 ETH for the NFTs, they're now going for 1.5 ETH (~$2,825) at floor, a 0.5 ETH (~$925) loss. The floor price of the original Azuki collection tanked from ~15 ETH (~$28,200) to ~9 ETH (~$16,920), a 6 ETH ($11,280) loss.

Azuki wrote an apologetic thread on Twitter, writing that they had "missed the mark... the mint process was hectic, the PFPs feel similar and, even worse, dilutive to Azuki." Perhaps they will wipe their tears with some of the 20,000 ETH they're sitting on.