MEV bot operators have used loans in the NFTX public pool to brand the BAYC ApeCoin (APE) tokens. This, coupled with the lack of liquidity after the launch of trading, led to abnormal surges in the asset’s rate.
The project team introduced the ecosystem-related token on March 17th. Its emission will be 1 billion coins and will remain unchanged. Among the holders of NFT BYAC, as well as derivative assets of MAYC and NAKC, 150 million APE will be distributed.
At the time of writing, 12,121 addresses have branded the tokens (over 79% of entities admitted to the airdrop).
Parsec Finance founder Will Sheehan noted that amid the distribution, the NFTX pool was literally “washed” by MEV bot operators.
When interacting directly with smart contracts of the NFTX platform, users have the opportunity to use the Flash Mint function. By analogy with flash loans (Flash Loans), it allows you to borrow assets without collateral and repay them in a single transaction.
Under normal conditions, this would bring nothing to the initiator of the operation, except for transaction costs. However, in the case of the APE airdrop, he made a significant profit. For this:
the user took NFT BAYC in the liquidity pool of the platform;
used the assets to claim a reward from APE;
sold all APEs;
returned NFT to the pool.
This way of earning, most likely, is no longer available – there are hardly any BAYCs left in the NFTX pools that have not yet participated in the airdrop.
The APEs obtained in this way were sold mainly on decentralized platforms like SushiSwap. At the last spike in the price of the asset, which at the moment exceeded $970 (on SushiSwap), always coincided with large sales.
Anomalous bursts of quotes are explained by the activity of MEV bots and the lack of liquidity. Analysts noted that arbitration with APE allowed operators to earn millions of dollars in a single transaction.
Airdrop was not without other incidents. Some users mistakenly sent APE to the smart contract address, thus blocking access to assets.