The Weekly Take
This past week has seen a slew of valuable NFTs (Bored Apes, Cool Cats, Kongz and Art Blocks among others) bought for bargain-basement prices due to a bug in the OpenSea NFT marketplace that allowed old listings to remain active unbeknownst to users. While users affected by this bug have been understandably upset at their loss (even with OpenSea promising to reimburse those affected), not everyone is in agreement about who ultimately shoulders the burden of responsibility.
On one side is the “code-is-law” proponents, who assert that the user is responsible for whatever happens when they interact with smart contracts. On the other side are those who assert that marketplaces creating and launching smart contracts are responsible — they have a duty to ensure their contracts can’t be used in unintended ways. This disagreement is not new to crypto. Decentralized finance has seen more than its fair share of smart contract exploits, including the recent case of a Canadian who drained Indexed Finance for $16 million now being pursued by law enforcement. However, it still remains to be seen how society will determine responsibility in such matters.
Regardless of where things come down legally, assets lost on the blockchain are generally difficult if not impossible to recover. With the growth of new tools from decentralized finance such as using NFTs as collateral, fractionalized pieces, or liquidity for trading, we should expect even more examples of smart contract exploits putting people’s NFTs at risk. Tools like revoke.cash can help manage which smart contracts can interact with which assets, however at the end of the day security ultimately rests with you.
Chart of the Week
Even with the incredible run up of prices for NFTs, the market cap across all NFT assets still remains considerably lower than other crypto assets. NFTs make up less than 2% of the value of all cryptocurrency.
News
Ryan Wyatt, formerly YouTube’s head of gaming, has announced that he has left to become the CEO of Polygon Studios. The Polygon blockchain has increasingly become a home for NFT games (Aavegotchi, Zed Run, Cool Cats upcoming play-to-earn game). He is just the latest in the recent wave of tech executives and engineers leaving for web3.
The planned launch of the Picasso NFT by the late artist’s granddaughter and her son has been put on pause after the Picasso Administration warned that the pieces would be considered counterfeit. Such conflicts are becoming more common with legal battles between Jay-Z and Damon Dash and Quentin Tarantino and Miramax over the right to produce NFTs of work that may have complicated intellectual property arrangements.
Justin Bieber is the latest celebrity to join the Bored Ape Yacht Club spending nearly $1.3 million for a single NFT from the collection.