This summer, during an investigation, on-chain detective ZachXBT created a free non-fungible token (NFT) 243M Theft. Cryptans found it and pumped up the coin’s capitalization to $15 million.
The Zora protocol automatically released the NFT created by ZachXBT into a tradable ERC-20 token. The on-chain detective claims that this all happened by accident.
ZachXBT scandal
In August, ZachXBT investigated the theft of $243 million from lender Genesis. To archive investigative content on the blockchain, the specialist created a free NFT on Base via the Zora protocol. The latter suddenly transformed 243M Theft into a memcoin, available for trading on decentralized exchanges (DEX).
The on-chain detective attached screenshots to the tweet, which actually show that Zora does not warn users about the conversion.
Recently, the Zora protocol introduced a new standard called ERC-20z. It allows NFTs to be converted into ERC-20 tokens and back, providing them with instant liquidity. Most likely, the conversion feature is enabled by default for all editions.
The initial supply of the ZachXBT token was approximately 3,500 coins, including additional assets to support the liquidity pool.
Enthusiasm and skepticism
Initially, the capitalization of 243M Theft did not exceed $10 thousand. However, after the crypto community learned about the token’s connections with ZachXBT, its market value soared to $15 million.
According to DEX Screenerat the time of writing, the capitalization of 243M Theft had stabilized at $2.5 million. The asset price is now $732.
The on-chain detective was upset by this whole situation.
The crypto expert added that he does not want users to speculate on his investigations.
However, some did not believe ZachXBT that he did not know about converting NFTs to memcoin.
The developers of the Zora protocol have not yet commented on the situation.
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Source: Cryptocurrency
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