What Can Be Done About Scammers Abusing OpenSea’s Stolen Ape Policy Over And Over Again?
OpenSea, the leading NFT marketplace, implemented a policy to prevent the trading of stolen Bored Ape Yacht Club NFTs. While that is a substantial development, the solution isn’t foolproof. Culprits continue to bypass this policy, causing much disgruntlement among enthusiasts.
OpenSea’s Stolen Ape Policy Doesn’t Work
One must commend NFT marketplace operators for implementing a solution to prevent the sale of “flagged” Bored Ape Yacht Club NFTs. Numerous NFTs in this collection have been stolen or scammed in the past year and a half. Preventing thieves from selling them and making bank is essential, although it isn’t easy to implement such a policy. The “stolen ape policy” was initially met with rejoicing but became a liability.
More specifically, one of the largest BAYC holders experienced that firsthand. Franklin had one of his collection offers – on an NFT flagged for suspicious activity – filled despite OpenSea’s stolen ape policy. A total of 65 WETH changed hands, netting OpenSea 1.625 WETH in fees. Unfortunately, Franklin cannot resell the ape, as the policy should prevent it from changing hands. Sadly, that isn’t the case, and a second similar incident affected the trader less than a week later.
It happened again – second time in a week someone has exploited OpenSea's stolen ape policy to sell to my collection offer after it was already marked as "under review for suspicious activity" (yellow mark). They used a "Match Advanced Order" function to "Mint" and sell to me. pic.twitter.com/21hijgtUse
— Franklin (@franklinisbored) January 22, 2023
Bypassing OpenSea’s stolen ape policy is possible through the “Match Advanced Order Function”. That method enables a third party to mint and sell NFTs regardless of being flagged by the marketplace. Other users with open bids may lose WETH or ETH through this exploit. Unfortunately, OpenSea has not offered any comment on the situation. Nor are they coming up with a solution to fix their stolen ape policy.
Something will need to change. Non-fungible tokens are designed to counter hacking and theft, as everything is visible on the blockchain. Moreover, when NFT marketplaces introduce policies, those should be enforced properly. OpenSea needs to catch up, and users demand an immediate solution.
Better Authentication Solutions Can Help
While OpenSea flags stolen BAYC NFTs – yet still enables them to be traded through an exploit – other approaches must be examined. For example, using a smart contract to flag assets and failing to restrict their trading is not an optimal outcome.
Instead, protocol-level verification of asset authenticity seems a more promising approach. More importantly, it ensures every off-chain or on-chain asset can only be represented once, negating exploits like the Match Advanced Order Function outlined above.
Using a certification solution can also bring more mainstream users into the crypto fold. The method proposed by Wakweli is designed to improve public confidence and introduce broader opportunities for participation.
Furthermore, it would help illustrate that NFTs aren’t “fraudulent”, even if marketplaces offer affected users little or no recourse. With proper tools, users and marketplaces can shape a better future for all ecosystem participants.