In December 2021, Adidas released 30,000 non-fungible tokens (NFTs) into the market. For those who might be scratching their heads, NFTs are cryptographic assets on the blockchain that point to a file that renders an artwork, such as a video, picture or sound. Adidas minted the NFTs on the Ethereum blockchain platform which is just one of many — including Solana, Tezos and Cardano — with NFT minting capabilities. The company netted $23.5 million from the sales event, which had historic implications for the metaverse beyond just revenue.

“The sale of NFTs by Adidas is a clear indication that major brands are widely adopting NFTs,” said Scott H. Weissman, CEO and co-founder of TokenSociety.io. Well-known companies across industries — from fast food chains like Taco Bell and Pizza Hut to luxury fashion brands like Cartier and Prada — are getting in on the action.

But back to Adidas. The sports fashion retailer assured eager fans that there would be a two-per-customer limit on the NFT drop. However, when the sale day came, their platforms just couldn’t keep up with the sophisticated bots that visited their site. One visitor used bots to purchase 330 tokens with an alternative smart contract that bypassed the rule.

A collection of 101 Bored Ape Yacht Club (BAYC) NFTs sold for $24.4 million at a Sotheby’s auction.

How do scalping bots manipulate NFT prices?

Scalping bots are nothing new. Bots are notorious for buying up limited-edition sneakers, concert tickets and other hot items, which scalpers sell at an inflated price on third-party sites. As NFTs have grown in popularity, scalpers have expanded their focus from fashion and entertainment to NFT auctions.

Scalpers use bots to manipulate the prices of NFTs, guaranteeing a sale at a favorable price and an even better resale (Read more...)