ZachXBT’s “Free NFT” Reaches $3.7 Million Market Cap

The Zora protocol automatically converted a free open-edition NFT created by on-chain detective ZachXBT into a tradable ERC-20 token, reports The Block.

In August, the researcher launched the non-fungible token 243M Theft on the Base network, dedicated to investigating the theft of $243 million from lender Genesis. He aimed to archive investigative content on the blockchain.

However, the Zora protocol used for the release unknowingly transformed the digital collectible into a meme coin, which began trading on decentralized exchanges.

The detective emphasized that the protocol’s user interface does not notify creators of this functionality and published screenshots as evidence.

The Zora UI currently does not give any indication to creators an ERC 20 token will also be launched at the conclusion of an open edition NFT mint (attaching screenshots for proof).

If people continue tagging me on posts I am going to dilute the piece with more mints that do… pic.twitter.com/RwLJVrv3RT

— ZachXBT (@zachxbt) November 5, 2024

The investigation revealed that the 243M Theft token was issued using the ERC20z standard with an automatic liquidity feature, an extension of ERC-1155.

This standard allows NFTs to be converted into ERC-20 tokens and vice versa, ensuring seamless trading through the decentralized exchange Uniswap, similar to Pump.fun. The option is likely enabled by default for all new issuances.

Currently, the Base blockchain contains 3529 243M Theft tokens.

The automatic liquidity provision led to ZachXBT’s converted NFT being sold on secondary markets. At the time of writing, the price of 243M Theft reached $1073, with a market capitalization of $3.7 million.

ZachXBT expressed disappointment over the ensuing hype.

“If people continue tagging me in posts, I will dilute the market with new NFTs without an end date or replace previously created tokens on Zora with a blank image,” he wrote.

The protocol team has yet to comment on the situation.

Back in October, ZachXBT criticized crypto influencer Sion Thomas, known as Ansem, for executing a Pump & Dump scheme involving numerous meme coins.