Taking advantage of a glitch, someone borrowed 5 Bored Apes and managed to claim $1.1M of APE tokens.
On 17th March, the creators of Bored Ape Yacht Club (BAYC), Yuga Labs launched the ApeCoin and announced to airdrop ApeCoin (APE) to anyone who owns one of their NFTs.
Following this announcement, the team assigned 150 million tokens which added up to a massive amount of more than $800 million. Each BAYC holder thus received 10,094 tokens (amounting to the range of $80,000 to $200,000).
However, someone managed to get a hold of these tokens even without meeting the condition of owning NFT.
So what transpired was that the ApeCoin airdrop was not handed out based on who owned which Bored Ape at a particular time in the past. Instead, anyone who owned a Bored Ape at the time of claiming the airdrop was eligible for the coin.
So in case, you gave someone your Bored Ape and you hadn’t already claimed the tokens; then they would be able to claim your tokens.
The simple catch here was that a person could get a hold of some Bored Apes that didn’t have their tokens claimed and they would only need to have Apes for a brief moment to claim the airdrop. Not just this, they could be given back instantly.
The arbitrage (which is also seen as an outright attack by many) was done by using both vault, a method to tokenize NFTs and also flashloan.
Also Read: Meet BAYC’s Main Founders: Greg Solano, Wylie Aronow
