An NFT was just sold for half a billion dollars, and then it was returned

The world of cryptocurrency is abuzz with NFTs and everyone seems to be going gaga over them. This hype is often boosted by the involvement of celebrities. However, this time, a simple NFT sale is gaining everyone's attention online. Why? The NFT was sold for a jaw-dropping half a billion dollars.

The sale of the NFT was recently made public on Twitter. The information was first captured in a tweet by a Twitter bot that tracks sales of CryptoPunks, an Ethereum-based NFT project that started in 2017. The Twitter bot tweeted on Friday that an NFT named Punk #9998 was sold for 124,457.07 ether (ETH), amounting to a mind-blowing $532.414 million.

Easy to guess, the tweet quickly became the talk of the Twitter-town, as everyone began to lose their minds over it. An NFT for half a billion dollars would have made the digital asset ownership model the biggest buzz in the world. Turns out, what many wanted wasn't to be.

It was quickly discovered that the NFT sale was just a gimmick to capture attention online. Not that the sale never happened. Instead, it was more like how you order things online and then return them if they don't suit you. The account that bought the NFT sold it back soon after, thus getting a full refund.

The half a billion dollar refund

This is not exactly how things flow in the NFT world, but that is the gist of what actually happened. Twitter user Robert Miller explains that the NFT put up for sale by contract A was bought by contract B for the mentioned amount of ether. Immediately after, contract A sent all the ether back to contract B.

An important thing to note here is, how did contract B have such an amount of ether (or basically money) in the first place? Apparently, the account holder took a flash loan for this transaction. A flash loan is an important tool in the world of cryptocurrency wherein a user can borrow an unsecured loan from a lender. No third-party intermediary is required for this loan, since the loan is governed by a smart contract that reverses it in case the borrower fails to pay it back.

In this case, since contract B got the entire amount back immediately from contract A, it paid off its flash loan within the transaction. In totality, no amount of ether was displaced.

The identity of the parties involved in the viral transaction is yet unknown, though it is believed that this might have been the doing of a single person. Regardless, the transaction has managed to direct the spotlight on to NFTs yet again and many crypto fans are glad about it.

We explained what NFTs are and why celebrities around the world are getting involved with these in an earlier article. You can read the article here to find out all about how NFTs work.