When Pledging APEs in NFT Pools Goes Wrong: Understanding the Risks Involved

According to reports, security company Paidun disclosed on social media that if users pledge APEs in NFT pools and sell NFTs, they may lose their pledged APEs. According to data disclosed by Paidun, the arbitrageur “0x06800a” has just purchased “Boring Ape” BAYC # 7810 at the address beginning, and has obtained 14300 pledged APEs worth approximately $60000.

Paidun: If APE is pledged in the NFT pool and NFT is sold, the pledged APE may be lost

Introduction

Recently, Paidun, a security company, released a warning to users who pledge APEs in NFT pools. According to the company, pledging APEs in NFT pools and selling NFTs is a risky affair that could cost users their pledged APEs. In this article, we will delve into the details of the risks involved in pledging APEs in NFT pools.

What are APEs and NFTs?

Before we dive into the risks involved, it is essential to understand what APEs and NFTs are. APEs, or Apes are digital tokens that were created by the Board Ape Yacht Club (BAYC). These tokens are unique and have different attributes, such as the color of the ape, clothing, and other accessories.
On the other hand, NFTs or Non-fungible tokens represent unique digital assets that can be purchased and sold like any other asset. Unlike Bitcoin or other cryptocurrencies, NFTs cannot be exchanged for other tokens at an equal value.

What are NFT Pools?

NFT Pools represent a method for individuals to collectively invest in NFTs. Users can pledge their tokens, and once the pool has acquired enough funds, the pool invests in an NFT.

Risks Involved in Pledging APEs in NFT Pools

As disclosed by Paidun, pledging APEs in NFT pools and selling NFTs can be a risky affair that can cost users their pledged APEs. For instance, suppose an arbitrageur, let’s say “0x06800a,” purchases an NFT pledged with APEs, such as a Boring Ape, worth approximately $60,000. In that case, the chances are high that the arbitrageur will sell the NFT and make a profit, leaving the APEs pledged by the user lost forever.
Moreover, there have been cases where individuals have created fake NFT pools, and users who pledge their tokens never see their returns. Therefore, it is essential to exercise caution before pledging APEs in NFT pools.

How to Minimize the Risks

While pledging APEs in NFT pools is risky, there are measures that individuals can take to minimize the risks involved. Below are some ways to reduce the risks:

Conduct Due Diligence

It is crucial to investigate and conduct research before pledging APEs in NFT pools. Conduct research on the pool’s owner to ensure they are trustworthy and have a good track record in the NFT industry.

Use Trusted Platforms

Users must use well-known and reputable platforms to pledge their tokens. Trusted platforms have security measures in place that reduce the risks involved.

Diversify Investments

Diversifying investments in NFT pools is essential to reduce the risks involved. Invest in different pools that have invested in different NFTs to limit losses in case one pool fails.

Conclusion

In conclusion, while pledging APEs in NFT pools can provide returns, there are inherent risks involved that users need to be aware of. Conducting research, using trusted platforms, and diversifying investments are some ways to minimize the risks associated with pledging APEs in NFT pools.

FAQs

1. Can I lose my pledged APEs by investing in NFT pools?
Yes. Investing in NFT pools is a risky investment, and users can lose their pledged APEs.
2. Can I invest in NFTs without using NFT pools?
Yes. Users can invest in NFTs directly without using pools by purchasing and holding them in their digital wallets.
3. How can I tell if a pool is legitimate?
Conduct research on the pool’s owner and look for reviews and feedback from other users. If a pool offers unrealistic returns or is too good to be true, it is likely a scam.