NFT trader mistakenly sent $129,000 CryptoPunk to burn address

An expensive NFT was accidentally burned by an investor who wanted to wrap it to borrow liquidity on

Burning wallet
Wrapping NFTs non-compliant with ERC-721 standard can be a challenge for users without a technical background

On March 25, an NFT trader Brandon Riley irreversibly lost his asset, CryptoPunk #685, which he had purchased for 77 ETH worth almost $135,370 at press time. Two weeks ago, at the moment of purchase, the NFT was worth about $129,000.

The trader planned to wrap his CryptoPunk and post it on, which could have earned him 7% annually. Riley specifically emphasized in his tweet that he did not want to sell his Punk on Blur.

Read also: A beginners guide to Blur, OpenSea emerging rival

To use, Riley had to wrap the NFT first. Wrapping makes it possible to connect NFTs minted before ERC-721 was adapted as the NFT token standard to newer DApps and marketplaces. Unfortunately, the trader accidentally sent his asset to a burn address.

According to Riley, he made a mistake when he tried to create a proxy wallet address due to a lack of technical knowledge and experience. "I should have known something was wrong and realized that this was a mistake, but I didn't. It wasn't until I went to mint my wrapped Punk that the astronomical gas gave it away," Riley explained in his Twitter thread.

Admitting that he alone was responsible for the mistake, Riley called it "the beauty and the curse of self-custody," and wished other Twitter users in the NFT community to be more careful than he was.

In response, other Twitter users also shared their expensive NFT losses. NFT artist NefticArt mentioned listing an NFT worth 3 ETH with 0 ETH. Others complained about falling victims to exploits that resulted in losses worth their entire savings.

Although Riley did not blame anyone for the incident, some Twitter users believe that developers should make the process more user-friendly. Meanwhile, user NFToga noticed that the instructions Riley used to wrap CryptoPunks were updated after Riley posted about his problem. The guide now explicitly states that a proxy wallet address should be other than 0x00...0000 which was a burn wallet Riley mistook for a proxy address.

Read also: BAYC just lost its top pricing spot to CryptoPunks

Burn addresses, also called null addresses or eaters, are used to destroy NFTs and cryptocurrencies which, are minted on a blockchain and cannot be simply removed. Sending an NFT to a burn address does not technically affect the asset, but it completely prevents potential access to the burned NFT since such addresses have no private keys attached to them

Currently, using a burn address is the only way to destroy an NFT. Originally, eaters were invented to increase the value of an asset by reducing its total supply, primarily for cryptocurrencies. This is also a method to take an unwanted NFT out of circulation.

In addition, burning NFTs is used as a gamified trading strategy, especially in the case of Web3 games like Gary Vaynerchuk's Book Games NFTs, where players can burn their assets to obtain other physical or digital rewards.