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How can I get discounted CryptoPunks through the Fracton protocol?

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Although the arbitrage model is clear, Fracton Protocol has not been known to the general users, so most people have lost this high-yield opportunity.

Original title: " Through the Fracton protocol, a user exchanged PUNKS at a 16% discount and obtained nearly 45% ROI "

Original source: NFT Research Institute

On July 31, Tiffany & Co.'s official Twitter announced that it will sell 250 limited NFTs at a price of 30 ETH on its NFT official website on August 5—— "NFTiff".

Users holding CryptoPunks can exchange for a physical punk necklace made of precious metals and gemstones by holding the NFT at the same time, and the necklace will be the same as that held by the user The CryptoPunks are exactly the same.

As soon as the news was released, the floor price of CryptoPunks rose by 10%, and reached a maximum of 77.55ETH on August 3.

On the day of sale, NFTiff was sold out in only about 20 minutes, and its highest transaction price on Opensea reached 55 ETH.

Left: NFTiff event official push Right: Pendant effect Picture

With such a high degree of attention, many people are trying to use this hotspot to market their projects .

For example, the CEO of Chain tweeted on August 11 that a CryptoPunks will be given out by lottery.

In addition, KuCoin also launched an activity on August 9 to use hiPUNKS to exchange CryptoPunks for NFTiff.

The price of hiPUNKS was around 0.14 usdt on August 9th. The floor price of CryptoPunks on that day was 73.95 ETH, which means that 140k usdt can be exchanged for 73.95 ETH worth of CryptoPunks and 30 ETH of NFTiff in an instant. Based on the price of ETH 1800usdt at that time, that is a 33.65% yield. So is anyone really going to exchange it? And did KuCoin really send out these 3 NFTiffs?

According to KuCoin's announcement and hiPUNKS introduction, hiPUNKS is one of the types of fragmentation tokens minted by the NFT fragmentation protocol Fracton Protocol (this protocol has also recently minted hiBAYC and hiENS4), each NFT entered into the contract will be locked and minted with 1 million corresponding fragmented erc20 Tokens. In turn, a certain amount of fragmented Tokens can be burned to exchange for NFT.

In this event, the whole process of exchanging hiPUNKS for CryptoPunks and gifting NFTiff is carried out on the chain. This gives us the possibility to track the whole process.

According to the announcement issued by KuCoin on August 1, hiPUNKS corresponds to the following 6 CryptoPunks.

The owners of these CryptoPunks can lock the contract address of Fracton Protocol Meta-swap (0x7fee302a14d6b945c0eb6da9c4426c8d75d38a73).

After locking the contract address of Fracton Protocol, you can see the contract on Etherscan at 09:52:36, August 11 , 2022 (UTC) A Crypto Punks with Token ID 9396 was transferred out.

The receiving address of Crypto Punks 0x94EB366AF0E72928D561FF4D4B1805F03E5CC7 can be seen. S and Fracton Protocol's Meta-SWAP contract There was an interaction and 1003 ERC1155 NFTs were swapped out. Then, another 1003 ERC1155 NFTs were swapped out for Crypto Punks #9396.

And this address did receive the NFTiff with Token ID 110 10 hours after the exchange.

After receiving the reward, the address quickly sold the received rewards at 80 ETH and 20 ETH CryptoPunks and NFTiffs.

In order to calculate the actual income of this address, the cost spent by this address to purchase hiPUNKS is necessary.

According to Etherscan records, the address received a total of 1,006,009 tokens from the KuCoin hot wallet at 09:38:47 on August 11, 2022 (UTC) hiPUNKS. Therefore, its cost price can be assumed to be the average price of hiPUNKS between the announcement release time and its transfer time: 0.137 usdt, then the user should have spent about 137,823.233 usdt.

Based on the ETH price (2000 usdt) when selling Punks and NFTiff at this address, then selling CryptoPunks can receive 80ETH (160,000 usdt), which is The profit of exchanging hiPUNKS for CryptoPunks each time should be

160,000 - 137,823.233 = 22176.767 usdt

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This means that the ROI of arbitrage using only hiPUNKS is 16%. And by selling the gifted NFTiff, the user arbitrages 20ETH (40,000 usdt). If the arbitrage income from exchanging CryptoPunks is added, the user's total profit is

22,176.767 usdt + 40,000 usdt = 62,176.767 usdt
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ROI reached 45%.

However, since only this one user successfully redeemed CryptoPunks during the KuCoin campaign, the remaining 2 of the 3 NFTiffs KuCoin used as prizes could not be given away , were sold at prices of 22.7ETH and 23ETH respectively.

Thus It can be seen that although the arbitrage model is clear, most people have lost this high-yield opportunity because the Fracton Protocol has not been known to the general users.

It is recommended that you pay attention to the KuCoin announcement and the project party Fracton Protocol, and there may be similar activities going online in the future.

Even if there is no activity, the daily arbitrage income of exchanging hiPUNKS for CryptoPunks can easily reach 16%.