NFT Investors using .ETH domains lost over $100,000 in NFTs due to OpenSea Bug

It’s been hard to ignore the growth in popularity of .ETH domain names, and for good reason. Just like domain names replaced IP addresses for websites, .ETH domain names have been seen as a potential replacement for wallet addresses which are exceptionally long and difficult to remember.

While I personally have seen a lot of people make the move to .ETH, I’ve been skeptical myself because these are the early days and well, things can and do go wrong, and in the world of blockchain, if a wallet address is wrong, you can lose whatever you’re sending to it…and there’s nobody to help you get it back.

It might just be the one big gotcha when it comes to crypto and NFTs in general. Decentralized means that you’re on your own. It’s up to you to decide how to to transfer and protect your assets, and when to embrace new ways of doing things.

Unfortunately, this week, a bug at the world’s most popular NFT Marketplace, caused users of .ETH domains to end up literally sending their NFTs into the ether…here’s the scoop from Decrypt:

He encountered the bug while transferring the first ENS name ever registered, rilxxlir.eth. Johnson tried to transfer that NFT representing the ENS name into his personal wallet (nick.eth), but OpenSea sent the NFT to an incorrect wallet address instead. He wrote that OpenSea’s interface failed to resolve the ENS name attached to his wallet, and “instead [populated] the ‘to’ address with some nonsense.”

In other words, the NFT was sent into the void. Due to the immutability of blockchain networks, the NFT representing the ENS name is now apparently lost forever, and cannot be transferred back to him. “Ownership of rilxxlir.eth is now permanently burned,” he tweeted.(Source – Decrypt)

So what does all this say about .ETH domains? Well I don’t think it says anything new. The reality is, we do need something to replace those epically long wallet addresses and .ETH makes a lot of sense. That being said, right now if you’re using one, you’re part of a “test group” so you’ll need to know there are risks involved.

I know Ethereum Name Service (ENS) is probably not too happy today, and this bug wasn’t a problem with them, it was an OpenSea bug, but their customers were impacted so it’s just as painful. These are the early days, there will be growing pains, stay safe out there.

Morgan Linton

Morgan Linton