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NEW DELHI : Social media was buzzing on Friday morning when it surfaced that a non-fungible token, or NFT, was sold for more than half a billion dollars ($532.41 million to be precise). A Twitter bot that tracks sales of CryptoPunks sent out a tweet at 5:22 am IST on Friday that Punk #9998 was sold for 124,457.07 ether (ETH) or $532.414 million.

Punk #9998, which is a white-haired, green-eyed pixelated character, is among the 10,000 collectible characters built on the ethereum blockchain. CryptoPunks are among the most sought-after NFTs in the world. First released in June 2017 as one of the first NTFs on the ethereum blockchain, CryptoPunks project has been developed by American studio Larva Labs.

However, crypto-verse experts quickly pointed that the sale may have just been a publicity stunt.

According to Naimish Sanghvi, chief executive officer, Coin Crunch, a cryptocurrency media outlet, since the NFT moved back to the original wallet, the buyer and seller seem to be the same person or entity.

The identity of the person undertaking these transactions was not immediately known.

To understand how the person was able to undertake this transaction, one has to know a concept called 'flash loan' in crypto.

“Flash loan means that within a single block, one can raise as much funds as they want, provided they borrow and repay the amount within the same transaction. A block can have multiple transactions, and since ethereum is a smart-contract based blockchain, an individual can do multiple transactions within one transaction," said Sanghvi.

There are DeFi (decentralized finance) projects that provide the facility of flash loans.

“So, in this instance, the individual borrowed more than 124,000 ETH from different sources within the same flash loan, sold the CryptoPunk and then bought the NFT back to the original account and then repaid the loan. Everything was done within the same transaction," he added.

The Punk #9998 is, therefore, now with the same person who had it before.

However, experts say that the individual had to pay a transaction fee of around $800 for moving around the NFT, and in the process raised the price of the digital collectible.

Additionally, the sale of Punk #9998 at $532.41 million will not be counted among the highest sold NFTs as the transaction happened within the same wallet.

The NFT space exploded earlier this year after digital artist Mike Winkelmann aka Beeple sold an NFT for $69 million in March 2021.

After Everydays: The first 5000 days by Beeple, CryptoPunk #3100 and CryptoPunk #7804 are the most expensive NFTs, which were sold for $7.58 million and $7.57 million, respectively.

With the latest sale, CryptoPunk 8857 has become the fourth most expensive NFT sold ahead of Crossroads by Beeple, which was sold for $6.6 million.

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