securing your NFTs
This week a loophole on OpenSea was exploited and someone bought many precious NFTs at a fraction of their full value. What happened? And what can you do to protect your collection from this exploit?
First of all, don’t panic: this loophole only happens under very specific conditions.
Here are the steps necessary to trigger it:
You list an NFT for sale on OpenSea
You transfer the NFT to a different wallet
OpenSea will then cancel the order on its user interface, but it won’t cancel it on the blockchain
You transfer the NFT back to the original wallet
The item is not listed for sale on the OpenSea website, but it is still for sale according the the blockchain.
Someone buys the NFT for the price you set at Step 1
One of the fundamental concepts of blockchain technologies is that changing the blockchain requires payment. This is known as “gas” on the Ethereum blockchain. So because no one paid the gas to cancel the order created on the blockchain in step 1, the open order lurked there for someone to find.
In this case, the exploiter did not find the miss-priced NFTs accidentally. They built a script and automated the process.
What can you do to protect yourself from this exploit?
We have some good news and some bad news.
Let’s do the bad news first: protecting yourself from this exploit is not as easy as canceling your past “for sale” listings. That’s because enterprising bots are now scouring the blockchain and front-running cancelation orders.
If you try to cancel then you’ll be alerting the bot who just might snipe it.
The good news is there is still a fix:
Transfer the NFT to a new wallet.
Cancel the “for sale” listing on the original wallet.
The moral of the story is that the blockchain always remembers.
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