On Nov. 29, RTFKT Studios was all set to begin the public sale of its CloneX avatars. Then the attacks on its website started.
At just after midnight on Nov. 30, the metaverse-first design outfit hit the pause button. “Minting will start tomorrow,” the firm tweeted. “Apologies for this fck up, we had way too many attacks.”
The sale resumed as promised and quickly sold out, according to a message in the team’s Discord. Yet some users are skeptical that an attack ever occurred. Such is life in the wildlands of NFT auctions these days — under digital assault one minute, selling out a hot avatar the next, then mystery around whether an attack occurred at all.
With the metaverse entering a phase where activity must match the hype, investors are eyeballing sales like RTFKT’s for such strangeness. And the money involved is massive.
As it happened, the public sale was initially meant to be conducted with a Dutch Auction. The starting price: 3 ETH for one of the 20,000 CloneX NFTs. A Dutch Auction starts at a given price that declines if the assets aren’t sold. In RTFKT’s case the CloneX sale was set to go down by .1 ETH every 30 minutes, meaning it would take 10 hours for the sale to reach a price of 1 ETH.
If all 20,000 of the CloneX had sold for 3 ETH at the cryptocurrency’s price at the beginning of the mint, the total sales would have been worth over $250M.
After suffering the attacks cited by RTFKT, the project changed the sale method to a flat 2ETH price.
CloneXs are a collaboration between RTFKT and Japanese artist Takashi Murakami. The NFTs unique traits and rarities have yet to be revealed, meaning all the NFTs currently have the same value.
Some people thought the initial starting price of 3 ETH was too much or that the collection wasn’t going to sell out. Others think CloneX owners could be holding assets akin to those of CryptoPunks or Bored Ape Yacht Club.
Bored Ape minted for .08 in April and has rocketed to a 46.99 ETH floor as of Nov. 30, according to OpenSea, the NFT marketplace.
Mints above 1 ETH aren’t unheard of, too. Meebits, a 3D avatar project from CryptoPunks creator, Larva Labs, were available to the public at a 2.5 ETH price back in May. CloneXs are also 3D avatars in the sense that they’re intended to be used to move around in the metaverse, rather than just being static 2D pictures.
OKHotshot, an on-chain analyst who identified and convinced a scammer to return 88 ETH to another NFT project, is skeptical of RTFKT’s reasoning behind pausing the auction. He thinks with the $8M the project raised, better load balancing and servers could have prevented attacks.
OKHotshot told The Defiant he’d like to see the IP addresses which attacked RTFKT’s CloneX website to confirm their legitimacy. The analyst said he was able to access the site during the initial public sale from many different countries using a VPN.
Samuel Cardillo, CTO at RTFKT, said the project had identified the IP addresses that were making the attacks. “We are spinning up more origin servers for our load balancing and preparing waiting rooms,” Cardillo tweeted. “We have also identified most of the IP ranges that were attacking us and blocked all of them.”
The sale encountered other issues. Holders of other RTFKT NFTs were permitted to take part in a pre-sale of the CloneX NFTs on Nov. 27, undercutting the public sale’s Dutch Auction.
“The resale market was actually frontrunning the project they bought into in presale, which was interesting,” OKHotshot said. So if for example, the Dutch Auction had CloneXs priced at 2.8, presale buyers could offer their NFTs at 2.5. This would attract offers that otherwise would have gone to the Dutch Auction, bringing that price lower every 30 minutes, meaning the sales weren’t what they could’ve been.
And the RTFKT team temporarily closed the Discord for comments during the thick of the fray for “not being able to moderate chats, false information spreading, fud and trolls.”
Some members of RTFKT’s Discord believe the project saw that the Dutch Auction was trending towards 1ETH and decided to cancel the public sale.
Others doubt there was foul play.
“With the launch of any project, you’re always going to second guess whether you launched in the right manner,” Tony Herrera, who participated in the free CryptoPunks mint back in 2017, told The Defiant. He is also a founding member of Vesto, a blockchain-enabled banking platform.
Bound to Go Wrong
According to Herrera, more than 13,000 of the 20,0000 CloneXs had been sold before the project halted the mint, indicating that the project really cancelled the mint due to problems with the website, rather than insufficient demand. The NFT collector participated in both the CloneX presale and public sale at 3 ETH levels.
Herrera added that, having developed and deployed smart contracts himself, he knows that things are bound to go wrong. That said, the NFT collector is highly critical of Dutch Auctions as a sale mechanism and concedes that 3 ETH at the crypto’s current prices is a big ask.
Regardless, the project did sell out at 2 ETH, effectively demonstrating demand at that price point. Indeed one user was undeterred by the controversy swirling around CloneXs, reportedly buying 60 of the NFTs.
Read the original post on The Defiant.