Yesterday (17), the creator of the collection Bored Ape Yacht Club (BAYC)Yuga Labs, made an “airdrop” (“distribution”, in free translation) of tokens ApeCoin (APE) for anyone who has one of their non-fungible tokens (NFTs).
Yuga Labs has allocated 150 million tokens — 15% of the total APE supply — to holders of NFTs in the BAYC and Mutant Ape Yacht Club (MAYC). The amount of tokens amounted to more than $800 million. Each BAYC holder received 10,094 tokens.
The value of those coins was over $800 million and each BAYC holder received 10,094 tokens worth between $80,000 and $200,000. However, someone took advantage of the giveaway by utilizing several unused Bored Ape NFTs to get an airdrop of $1.1 million in ApeCoin.
The unknown user borrowed five BAYC NFTs to claim the airdrop after discovering them in a vault. This vault was built using the NFTX protocol. It contains Bored Apes: #7594, #8214, #9915, #8167, and #4755.
Rather than purchasing the NFTs, the person used a flash loan to claim the airdrop, then quickly sold the 60,564 ApeCoin on Uniswap. All together, the five Bored Ape NFTs are valued around 500 ET
To redeem tokens even without being the effective owner of Bored Apes’ NFTs, the user found a “safe” with five items from the collection, which had not yet been used to redeem ApeCoin.
A “vault” is a way of tokenizing an NFT or a set of them. This is done by taking a group of NFTs, putting them in the vault, and then creating a token.
This token can be staked to receive rewards or it can be sold. Anyone who has a sufficient amount of tokens can redeem them for the underlying NFTs.
most till Bored Apes #4755, #8167, #9915, #7594, and #8214 Displays 500 ETH valueor $1.5 million at the current price. Our quidam could have bought the NFTs, but it would have cost him dearly. He then decided to do otherwise.
He used what is called. flash loan, a type of low-cost cryptocurrency lending, specifically a technique used during the Hundred Finance and Agave protocols hack earlier this week. To make a claim flash loan, our guy barely had to use a BAYC as collateral.
He was able to buy the loan he received Enough coins from the vault to use 5 BAYCs to take advantage of the AirdropIt allows you to redeem five times the reward in ApeCoins or over 60,500 coins. In the process, they were sold for $1.1 million on the Uniswap (UNI) platform in Ethers (ETH). The person then resold BAYC, which served as collateral to repay the initial loan, before leaving their Ether in their pocket.
Whether we attribute this to a well thought-out arbitrage strategy or an airdrop exploit, one thing is for sure: BAYCs have seen big market moves During the airdrop period as shown in the chart below.