NFT trading bot mocked, losing 800 ETH. Is Web3 transparency a double-edged sword?

Written by: 0xTransparency, Deep Tide TechFlow

As the weekend arrives, the somewhat quiet NFT market puts on a spectacular show of "the mantis stalks the cicada, while the oriole is behind," with an intriguing twist.

NFT big shot Hanwe (@HanweChang) discovered that a bot on Blur was mimicking his bidding strategy, so he decided to "turn up the heat" on this bot, playfully toying with it, and publicly tweeted about making a profit of 800 ETH (approximately 1.46 million USD).

How did he do it?

Users familiar with Blur should know that the platform allows for Trait Bidding, meaning you can bid on specific traits you like within an NFT collection, such as an Azuki character wearing glasses or having a white background.

Another well-known figure in the Chinese community, 0xSun (@0xSunNFT), analyzed the events of Hanwe's playful interaction with the bot:

Hanwe realized that the bot would follow his bidding strategy, so he preemptively bought several Azuki NFTs (possibly using another account) and then began his act: he placed a bid of 50 ETH on multiple Azuki NFTs with an Off White A background.

Subsequently, the bot automatically followed his bidding strategy and also placed a bid of 50 ETH. At this point, Hanwe immediately accepted the bot's bid, selling the batch of Azuki NFTs to the bot for the high price of 50 ETH; at the same time, he withdrew his earlier bait bid.

In simple terms, he bid high on his own NFTs, lured the bot to follow suit with a high bid, and then withdrew to pocket the profit.

The bot has no tears. The transaction records of these 12 Azuki NFTs are coldly inscribed on the blockchain explorer, with each Azuki's selling price converted to USD being quite substantial. The owner of the address 0x97 behind the bot must be feeling quite distressed.

Will you return the "stolen" money?

800 ETH is no small amount.

Just as Hanwe was happily showcasing his bait operation on Twitter, the entity behind 0x97 began to respond.

A Twitter user named elizab.eth left a comment in Hanwe's bragging post:

"We would like to discuss the bounty matter with you. The money you stole from our bot, if returned 90%, you can keep 10% as a bounty."

Note that the word "stolen" is used here.

The bot followed someone else's strategy and was toyed with, resulting in a loss. Is this considered stealing? If this were in the real world, such a significant loss of property and the ensuing disputes could very well become a legal case.

Hanwe's playful act was not particularly complex; he simply exploited the bot's mindless following behavior to teach it a lesson. Morally, it does seem a bit cunning; however, in the crypto world, there are no strict rules to constrain participants' actions.

If this can be considered stealing, then various market manipulations, ancient practices of unplugging the network, and project teams saying "sorry, we failed" could all broadly be termed stealing, taking away the chips from the hands of the retail investors.

Conversely, when the bot successfully follows others' strategies to earn profits, did it ever consider being kind and giving others a little benefit?

In a dark forest like Web3, perhaps you cannot enjoy the meat when you are the hunter and then cry out in pain when you are the prey.

Everything comes full circle. There will always be moments of skill and moments of incompetence. Especially when there are no rigid regulations and systems in place, all the ups and downs become a wild, chaotic, and gamble-accepting market behavior.

In elizab's latest tweet, there seems to be a newfound openness after the realization:

It is somewhat ironic that the lessons you paid for from others, others also have to pay to learn from someone even higher up.

In our Web3, there are many lessons and few teachers.

Public Announcement or Quietly Making a Fortune?

In Hanwe's comment section, some questioned why he would publicly acknowledge such a playful act with the bot, as it seems a bit malicious, and 800 ETH is indeed an eye-catching number.

Whether it's bragging or venting, the personal motives and preferences of the big shots are not the focus of our discussion. This incident seems to lead to another topic: in Web3, all on-chain transactions and decision-making behaviors appear so transparent; any action, if you want to dig into it and promote it, can reach the level of a public announcement;

But as the old saying goes, we still need to learn to quietly make a fortune.

Public announcement or quietly making a fortune? Interestingly, your quiet fortune-making will be closely monitored by various on-chain detectives, following bots, and hidden adversaries, who will study, follow, imitate, and exploit it…

And if a quietly made fortune trading strategy is closely monitored and followed on a large scale, does it still have the effect of making money?

On-chain, there is a constant game of strategy. You quietly make a fortune, I copy your fortune-making strategy, but it is very likely that you intentionally showed me this strategy…

With layers of tricks and multiple reversals, many times we cannot fully understand a person's true motives through the transparent and open on-chain data.

And this transparency is precisely the arbitrage space left for different levels of participants in Web3:

Third-rate retail investors believe in transparency;

Second-rate bots delve into transparency;

First-rate big shots exploit transparency.

May every little transparent participant in Web3 safely walk their own path.