From theblock by Vishal Chawla

A token unintentionally created by onchain sleuth ZachXBT on the Base network reached a $3.4 million market cap.

This situation arose after ZachXBT used the Zora protocol in August to issue open-edition NFTs “243M Theft” as a free token related to his investigation of a $243 million theft involving a Genesis creditor. Unbeknownst to ZachXBT, the Zora protocol allows the conversion of these open-edition NFTs into ERC-20 tokens, making them tradable as memecoins on decentralized exchanges.

ZachXBT clarified that the intent behind the digital collectible was to archive investigative content permanently on the blockchain, akin to his previous articles hosted on Mirror. However, he noted that the Zora user interface failed to make it evident that an ERC-20 token would be issued after the NFT mint.

“The Zora UI currently does not give any indication to creators that an ERC-20 token will also be launched at the conclusion of an open edition NFT mint,” ZachXBT wrote in response to an X post by crypto influencer Ansem regarding the token — while also providing screenshots as evidence of the UI’s lack of information on this critical aspect.

Zach had minted his most recent Zora investigation using its "ERC20z" token standard, and about 3,500 tokens in question were created on Base. 

Zora’s automatic liquidity provision is implemented through an extension of ERC-1155 called ERC20z. The standard allows NFTs to be wrapped into ERC-20 tokens or unwrapped back into ERC-1155 tokens. This enables seamless trading via decentralized exchange Uniswap, similar to functionality offered by token creation platforms such as pump.fun.

Apparently, Zora has made this standard the default option for all new mints. However, the liquidity provision led to the token being bought and sold on secondary markets, contrary to ZachXBT’s intention.

From its initial valuation of almost zero, the token’s market cap escalated dramatically, with a current valuation of $970 per token and a market cap of $3.4 million at the time of writing.

Reacting to the speculative frenzy, ZachXBT expressed frustration over the situation, “If people continue tagging me on posts, I am going to dilute the piece with more mints that do not have an end date and possibly take other actions like replacing artwork off Zora with a blank image.”

Zora did not immediately respond to The Block’s request for comment.