NFT fans lose millions in video game real estate sales

Jimmy2x

Posts: 94   +8
Staff
Why it matters: The creator of the most recognizable NFTs available is again in the news for the wrong reasons. Bored Ape Yacht Club creator Yuga Labs recently made its Otherdeed collection available for purchase. It advertised the NFTs as a way to provide users with the ability to obtain land in its upcoming crypto-based MMORPG. Unfortunately, many fans instead walked away with nothing but disappointment, high transaction fees, and stolen funds.

Yuga Labs sold Otherdeed NFTs via Opensea. The collection sold (or at least tried to sell) tokens to claim real estate and resources in Yuga's upcoming metaverse game, Otherside. The NFT drop netted approximately $310 million in just a few short hours.

Unfortunately for Yuga Labs, the sale generated far more traffic than expected on the Ethereum blockchain. This increase in traffic resulted in Ethereum gas fees of up to $14,000 for some users and failed transactions for others. Gas fees are charges passed on to users to compensate for the computing energy of processing Ethereum transactions.

To make matters worse, some who experienced failed purchases were still charged for the energy costs. According to Crypto Briefing, users paid $165 million in gas fees during the sale due to Otherside's poorly developed smart contract code.

Smart contracts are a feature of Ethereum's ERC-20 token and the bread and butter of Ethereum-based applications. The contracts are small programs stored on the Ethereum blockchain that execute automatically at a specified time. The contracts require no input or action from a third party. Instead, they initiate action between two entities when all pre-defined criteria are met and the transaction has been validated across the Ethereum network. In this case, the poorly developed smart contracts and their ill-defined execution criteria resulted in massive congestion and high transaction fees across the Ethereum network.

But what good story about NFTs is complete without scammers trying to take their cut of the action? In addition to the technical challenges and outrageous transaction fees, some NFT collectors were drawn in and taken advantage of by phishing attacks via fraudulent sites offering gas refunds and additional NFT minting opportunities. Many scammers required users to register and connect their wallets for a full gas refund and access an Otherside Lands raffle list, leaving their assets vulnerable to unintended access.

The attack resulted in millions of dollars in NFTs being stolen and sent to scammer's wallets. ZachXBT, a self-proclaimed crypto "rug pull" (scam) survivor and on-chain transaction investigator, has identified several fraudulent sites and wallet addresses, one of which appears to have earned more than $5 million from unsuspecting users.

This week, Yuga Labs stated that they've started returning gas fees to users who initiated transactions that failed due to network conditions caused by the NFT minting event. While the move may make some attempted investors whole again, users who fell victim to the phishing scam are out of luck (and whatever funds they lost).

That hack is by no means the first targeting NFTs or the Bored Ape Yacht Club itself. In April, the company's social media accounts were hijacked and populated with fraudulent land minting event links. The hack resulted in millions of dollars in NFTs being transferred from user wallets to the hacker's wallets.

The volatility and potential for quick financial windfall make NFTs and crypto an attractive option for many who may not understand the underlying technology. Unfortunately, this creates a target-rich environment for hackers looking for unsuspecting victims. With no third party involved, users have an increased responsibility to stay vigilant and protect their information and assets.

Permalink to story.

 

Morphine Child

Posts: 135   +243
Burning the money would be money better spent. It would give you some warmth for a few seconds at least which is far more use than you could ever get for spending it on a jpeg of a monkey.

NFTs really are the proof that these days you can sell anything to people.
 

blackdreamhunk

Posts: 110   +6
Yes or no question was star citizen very frist nft game and did inspire nft games??

I am just wondering didn't people make many confessions here on TechSpot that star citizen is the very first nft game? I am told not a victim and I must keep star citizen ok. I have asked CIg for my money back and they refuse.

I was silenced here on MMORPG and Techspot also pc gamer along with disqus.


I waiting for star citizen to flop or Chris Roberts fails to deliver on all his promises but every day I ask CIG support to give back my money!

being silenced and harassed is so cool it is a cool thing for news organizations to hide from people's honest thoughts and comments and then claim freedom of speech on the internet and expression right?




don't ever talk me about freedom of speech again. I hope no BIG tech CEO never talks about sharing what really think again or forces me to share my thoughts again on the internet.


ghosting and hiding people's comments and pain is really cool!!!

If Russia or china censors journalists I am ok with that you know why journalists and big tech do it to me.

techspot did it to me

Pc gamer did it to me

disqus. did it to me
 
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Lew Zealand

Posts: 2,151   +2,604
TechSpot Elite
Doesn't matter where the money's coming from or where it's going, as long as these people keep the economy going with their gormless speculative purchases. Just as long as I don't have to.
 

BoowieBear

Posts: 30   +48
I am just wondering didn't people make many confessions here on TechSpot that star citizen is the very first nft game? I am told not a victim and I must keep star citizen ok. I have asked CIg for my money back and they refuse.

You don’t seem particularly censored to me.

I was silenced here on MMORPG and Techspot.


I waiting for star citizen to flop or Chris Roberts fails to deliver on all his promises but every day I ask CIG support to give back my money!

being silenced and harassed is so cool it is a cool thing for news organizations to hide from people's honest thoughts and comments and then claim freedom of speech on the internet and expression right?


don't ever talk me about freedom of speech again. I hope no BIG tech CEO never talks about sharing what really think again or forces me to share my thoughts again on the internet.


ghosting and hiding people's comments and pain is really cool!!!

If Russia or china censors journalists I am ok with that you know why journalists and big tech do it to me.

techspot did it to me

Pc gamer did it to me

disqus. did it to me

You don’t seem particularly censored to me.
 

kiwigraeme

Posts: 1,050   +777
Reading the story - first thought what a complete ****show

However contrary to some people's assertions there are real victims

These "Investors" can live in La la land .
Oh I just that the money out of the Mortgage, kids Uni fund, retirement fund - Bosses expenses account - make like sqillions - pay back stolen money from work . Family and friends will love me as drive away with a new partner in my Lambo - to my endless party life
 

captaincranky

Posts: 18,745   +7,683
Are we really so sure that isn't money laundering? At least among rich folk with money they need to hide.

! sell you an imaginary ship

We meet in a country with a non extradition treaty

I hand you a briefcase full of money, minus my cut, of course.

You go back home and piss and moan how badly you got ripped off.

You hide the briefcase under you bed, or the money in an offshore account.

We both have a good laugh at the fed, and the peasant fools that believe that NFTs are real, and really have had their money stolen..

So, we've committed a crime right under people's noses, and garnered their sympathies for doing it.
 
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Loli Pop Carbon

Posts: 42   +40
Googled BAYC and Otherside, none of them are interesting for me, and I lost halfway through their marketing ****, having no idea what they are talking about.

0.08ETH (that's USD 2.5k for f sake) for a randomly generated ape JPEG and membership to a forum doesn't look appealing at all. I fail to understand why people want it at all..
 

emmzo

Posts: 613   +768
Are we really so sure that isn't money laundering? At least among rich folk with money they need to hide.

! sell you an imaginary ship

We meet in a country with a non extradition treaty

I hand you a briefcase full of money, minus my cut, of course.

You go back home and piss and moan how badly you got ripped off.

You hide the briefcase under you bed, or the money in an offshore account.

We both have a good laugh at the fed, and the peasant fools that believe that NFTs are real, and really have had their money stolen..

So, we've committed a crime right under people's noses, and garnered their sympathies for doing it.
Do you seriously think a whole "industry" created to sell nothing of value for billions, has no money laundering? Common folk is hyped with gold rushes and "the future", while the big guys use the lack of oversight to control it for all kinds of nefarious activities.
 

captaincranky

Posts: 18,745   +7,683
Do you seriously think a whole "industry" created to sell nothing of value for billions, has no money laundering? Common folk is hyped with gold rushes and "the future", while the big guys use the lack of oversight to control it for all kinds of nefarious activities.
Are your reading skills so seriously so truncated, that you are unable to understand that's exactly what I sketched out, a money laundering strategy?

Because if they are, have I got an NFT for you......
ass_backward.jpg


I had a better one, but the forum software wouldn't load it, due to the fact there was "a$$", in the URL :rolleyes:
 
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emmzo

Posts: 613   +768
Are your reading skills so seriously so truncated, that you are unable to divine that's exactly what I sketched out, a money laundering strategy?

Because if they are, have I got an NFT for you......
ass_backward.jpg
Well, no need to be rude, sir Captain Obvious! My question to you was hypothetical. Do you get that before you insult people? That's another hypothetical, just so you know.
 

captaincranky

Posts: 18,745   +7,683
Well, no need to be rude, sir Captain Obvious! My question to you was hypothetical. Do you get that before you insult people? That's another hypothetical, just so you know.
I stand corrected, your understanding of English is so deep as to be completely obtuse.

However, if sarcasm was your motivation for the rant, rant all you want. But there was no need to quote me. The quote definitely diluted your intentions.
 
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