Adidas’ successful Debut NFT Collection “Into the Metaverse” sent shockwaves to the NFT space but the drama is not over because someone sidestepped their NFT Minting Terms! One NFT holder managed to score 330 Adidas NFTs overriding the limit of two per Ethereum wallet.
Inside Scoop: How Did One User Breach Adidas’ NFT Minting Terms?
Montana Wong, a blockchain engineer and co-founder of product studio Sprise.co, shared on Twitter how the breach happened. The user deployed a custom smart contract a few hours before the minting. When executed, the contract generated 165 sub-smart contracts, each minting two NFTs and transferring them to the owner’s main ETH address.
“Since each sub smart contract has a unique address, the creator was able to avoid the 2 item limit imposed by the sale. After sending the NFTs to the creator’s main address, the child smart contract would self-destruct,” Wong added on the thread.
The contract’s owner paid around $104,000 (27.4 ETH) in gas fees to process the transaction. In addition to around $252,000 (66ETH) for the NFTs.
Adidas dropped their first NFT today.
The sale was capped at a max of 2 items per person and it sold out in less than a second
One person was able to purchase 330 in a single transaction using a custom smart contract
Quick 🧵 on how they did it
— Montana Wong (@Montana_Wong) December 18, 2021
As of press time, the Collection’s floor price has climbed to o.8 ETH versus the minting price of 0.2 ETH. Applying the existing metrics, the 330 NFTs have an estimated value of at least 264 ETH or almost $1.05 Million! So since the owner spent $104,000 for the gas fees and $252,000 for the actual NFTs. Then, the potential profit margin is around $600,000!
Meanwhile, the project has pulled in 12,000 ETH or over $43 Million, according to OpenSea’s figures.
Side Effects of the NFT Boom
Birth pains are natural for emerging industries and NFTs are not immune from this. In the past months, we’ve seen several gray areas, particularly in terms of intellectual property and rights. For example, Miramax sued Filmmaker Quentin Tarrantino over his move to release NFTs of unreleased content from Pulp Fiction. There’s also the ugly trend of people stealing someone’s art and selling them as NFTs. Comic Book Artist Liam Sharp and digital concept artist RJ Palmer are the latest victims.
Unfortunately, scams and hacks are also very rampant. Animoca Brands had to cover the losses after scammers hacked Phantom Galaxy’s Discord channel. The overall exposure was 265 ETH or about $1.1 Million in 3 hours.
So what stands out in the case of Adidas?
In the cases mentioned above, the users are the victims. The case of Adidas shows that even projects are vulnerable to attacks. Hopefully, this will serve as a wake-up call for other projects that security is as important as sales, marketing and community-building.
Industry Landscape
The sneaker NFT category is heating up! Digital shoemaker RTFKT is now under Nike’s umbrella. According to Nike CEO John Donahoe, they expect this move to accelerate the brand’s digital transformation.
With competitors Adidas and Nike in the mix, sneakerheads are definitely in for a treat!
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This article is educational material.
As always, make your own research prior to making any kind of investment.
