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A Warning for NFT Enthusiasts: Why Pledging APEs in NFT Pools May Result in Losing Your Funds

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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 di

A Warning for NFT Enthusiasts: Why Pledging APEs in NFT Pools May Result in Losing Your Funds

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

Recently, security company Paidun has raised concerns about the practice of pledging APEs in NFT pools. According to reports, users who pledge APEs risk losing their funds if they sell their NFTs. In this article, we will delve deep into this issue, understand how NFT pools work, and explore the reasons behind this warning.

NFT Pools: A Brief Overview

NFT pools are a relatively new concept in the world of cryptocurrency. They work by pooling funds from different investors to buy into a single NFT (non-fungible token) with the goal of selling it at a profit. The profits are then divided among the investors based on their contribution. NFT pools have become increasingly popular due to their potential for high returns on investment.

The Risks of Pledging APEs in NFT Pools

According to Paidun, if users pledge APEs in NFT pools and sell their resulting NFTs, they may lose their pledged APEs. This warning is rooted in a recent incident involving the arbitrageur “0x06800a.” The arbitrageur purchased “Boring Ape” BAYC # 7810 and obtained 14300 pledged APEs worth approximately $60,000. This incident highlights the risks associated with pledging APEs in NFT pools.
One potential reason for this risk is that the NFT pools may not have sufficient liquidity to meet investors’ redemption demands. In such cases, investors may find themselves unable to cash out their pledged APEs. Another possibility is that pledging APEs may result in users losing out on potential price appreciation if they choose to sell their NFTs.

The Need for Caution

The warning from Paidun serves as a reminder that investors should exercise caution when investing in NFT pools. It is essential to thoroughly research the reputation and credibility of NFT pools before investing. Additionally, investors must understand the risks involved in pledging APEs in NFT pools and make an informed decision.

Conclusion

In conclusion, emerging technologies like NFTs and NFT pools have introduced new risks and uncertainties in the cryptocurrency market. As the market continues to evolve, investors must stay informed and exercise caution when investing their funds.

FAQs

Q1. What are APEs in the context of NFT pools?
A1. APEs refer to Ape Tokens, which are used as collateral in NFT pools.
Q2. Can investors lose their pledged APEs while selling NFTs?
A2. Yes, according to Paidun, investors may lose their pledged APEs if they sell their NFTs.
Q3. How can investors mitigate the risks associated with NFT pools?
A3. Investors must thoroughly research the credibility of NFT pools before investing and understand the risks involved in pledging APEs.

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