On Oct. 3, CryptoPunk 1563 sold for 24,000 ETH, which was valued at $56.3 million at the time of the transaction. 

However, on closer inspection, the deal seems to be more of a marketing ploy than a genuine purchase.

Flash Loan Manipulation in NFT Sales?

Upon first glance, the sale of CryptoPunk 1563 looks like an extraordinary event, especially since this particular Punk had no unique or rare attributes. 

Purchased for just $69,000 worth of ETH in September, CryptoPunk 1563 would normally sell near the entry-level price for the collection, commonly referred to as a "floor Punk." With no special traits or features, the sudden 81,000% price hike raised immediate red flags in the NFT world.

A closer analysis of the transaction reveals that this sky-high sale price was achieved through the use of flash loans—a controversial practice in decentralized finance (DeFi). Flash loans are uncollateralized crypto loans that are paid back within the same transaction. These loans allow users to momentarily borrow a significant amount of funds without needing collateral, as long as the loan is repaid in the same block of the blockchain.

In this case, the supposed buyer of CryptoPunk 1563 used a flash loan of 24,000 ETH from the DeFi protocol Balancer. The seller then paid back the loan, leaving no real money exchanged between parties. Despite the high price tag and the NFT moving between wallets, reportedly no one involved in the sale made any actual profit, except for paying gas fees and network costs.

Not the First Time: Flash Loan Stunts in NFT Markets

This isn't the first time an inflated NFT sale has been conducted using flash loans. Back in October 2021, a similar event occurred when someone used flash loans to purchase a CryptoPunk for $532 million. 

Like the recent case of Punk 1563, that transaction was merely an on-chain trick rather than a legitimate sale. The NFT’s creator, Larva Labs, later clarified that they would not recognize the sale as valid, and many NFT data platforms followed suit, disregarding it as a legitimate transaction.

Marketing Stunt or Genuine Sale?

According to some in the crypto community, this flash loan setup is more than just a manipulative stunt—it’s part of a broader marketing strategy. Pseudonymous crypto commentator 0xQuit suggested that the transaction is a promotional effort to draw attention to a new “Kamala Harris Punk” memecoin. 

The 24,000 ETH figure was not intended as a serious offer, but rather a way to grab attention and drum up interest in Punk and the associated token.

As per 0xQuit, the plan is for CryptoPunk 1563 to be sold to the highest bidder in seven days, with the minimum bid equal to the amount raised in a presale for the new memecoin. The developers behind the project are expected to receive 10% of the token supply and 10% of the funds from the presale and eventual Punk sale.