SPOTLIGHT: As TokenWorks Deployed Its NFT Strategies Across Web3, An Anon Launched A Strategy Of Their Own And Walked Away With More Than $800K
- Kyle
- 2 days ago
- 2 min read
As TokenWorks deployed its NFTStrategy coins across Web3, one anonymous user deployed a strategy of their own and walked away with more than three quarters of a million dollars.
On Friday, the perpetual NFT machines began to spin around the swamp and broader NFT space with the launch of TokenWorks’ Bored Ape, Pudgy Penguins, Moonbirds, Meebits, and CryptoDickButts strategy coins. Each coin is powered by a 10% trading fee that accumulates to purchase the token’s corresponding NFTs.
As these coins launched, degens aped in hard, paying as much as a 95% buy tax in the first minute. That fee dropped 1% per minute until it eventually leveled out at the protocol’s standard 10%.
Amidst the fog of launch, Wallet 0xa3d297423b17a3894dddd582dc41ff20e237ab75 deployed a strategy of their own. Instead of letting the contracts buy floor NFTs with the collected fees, they managed to get them to purchase NFTs from them at 3–5x the floor price.
The contracts weren’t hacked, they were running as designed. The issue was that nobody was around to trigger them when it was time to buy floor NFTs. That meant the fees piled up, and Wallet 0xa3d297 swooped in and took full advantage.
“The Strategy contracts are not broken, but the market is (currently) inefficient,” Yuga Labs’ Head of Blockchain 0xQuit explained. “I pointed out yesterday that the contract can be triggered to buy an NFT by anybody as soon as it has enough in fees for a floor. Whoever triggers it can pocket the excess fees, if any, for themselves as a reward. In a perfect world, MEV will take care of this by triggering purchases as soon as the reward is greater than the cost of gas to trigger. However, our world is imperfect, and fees accumulated so quickly that the contract reached a 2x or even 3x multiple over floor in fees without a purchase being triggered, leaving an enormous opportunity for somebody to scalp rewards. As more bots jump on the opportunity, the edge will subside and eventually reach an equilibrium of almost zero profit to be made by the triggering party.”
In total, Wallet 0xa3d297 netted 181.706 ETH or $813,400 USD by buying and selling 10 Apes, seven Moonbirds, five Pudgy Penguins, and four Meebits over a three hour stretch.
To ensure this doesn’t happen again, 0xQuit has deployed a bot to automatically trigger the contract’s floor NFT purchases once they accumulate enough fees. So we probably wont be seeing anything like this again.
“Looks like the NFTStrategy arb has mostly calmed down,” he tweeted. “But just in case I just deployed a bot to trigger purchases as soon as there are enough fees to do so. Shouldn't see anymore fuckery on that front. To be clear, this is deployed across all NFTStrategy collections. Apes, Pudgys, Dickbutts, Birbs, and Meebs all covered.”
To learn more about these NFTStrategy coins or check out their holdings, visit TokenWorks’ website: https://www.nftstrategy.fun
