NFT Buyers Who Lost Thousands Due To Faulty Smart Contracts Say Manifold Is Trying To Deflect The Blame
The NFT minting platform Manifold said a combination of bots and “too much traffic” were responsible for a chaotic NFT drop that caused hundreds of buyers to lose thousands of dollars worth of $ETH in gas fees, without ever receiving the tokens they purchased.
The “Ash Chapter-II : Metamorphosis” project by the digital artist Pak was a collaboration with 29 other NFT artists, including Pussy Riot, Paris Hilton and others. The March 28 drop was sold out within just minutes of its launch, yet it quickly became apparent that it was riddled with errors.
Worse yet, insiders who were among the first to become aware of the problems promptly dumped thousands of $ASH tokens that were required to buy the NFTs, crashing its price and leaving hundreds of buyers with bags of seriously undervalued crypto.
It’s thought that users lost thousands, potentially even millions of dollars, due to the higher than expected gas fees they paid, the failure to receive their NFTs, and the lost value of the $ASH tokens many still hold.
Some Twitter users say the failed drop was due to Manifold’s use of a “randomizer” that was designed to ensure buyers receive a random NFT from the collection. Unfortunately, the randomizer code doesn’t appear to have been audited, and errors caused many NFTs to generate much higher gas fees in $ETH than user’s wallets estimated. As a result, when transactions hit the blockchain many of them failed due to the lack of enough gas. So while the payments were rejected, users still lost their gas fees – up to 0.8 $ETH (worth $2,586 at the time of writing) in some cases – for the failed transactions and didn’t receive their NFTs.
User’s losses further escalated as the failure of the drop became apparent. Within minutes, large numbers of $ASH tokens were dumped on various exchanges, driving the price down by more than 60% in a matter of minutes. While this can’t be confirmed, the suspicion immediately fell on “insiders” connected to Manifold in some way, who would have been the first to learn of the problems.
Manifold, which built the smart contract for the NFT sale, was quick to confess to the failed airdrop, but rather than admit any negligence it blamed the problems on a combination of three factors. It said these were gas spikes caused by aggressive botting, poor MetaMask gas estimation issues and some buyers manually changing their gas fee estimations.
“Unfortunately the drop did not go as planned,” Manifold said in an update on its website, adding that it accepts “full responsibility” for the problems.
The Twitterati was quick to criticize Manifold, with various users arguing that none of these apparent “issues” actually had any impact on the drop.
One irate Twitter user Cody Randolph (@c0dyrandolph) stated “bots interacting with a contract and/or network congestion does not affect the gas limit estimations of a contract. the only fault is due to the developers themselves.”
He added in a second tweet that Manifold is essentially trying to deflect the blame to others when the real reason was the incompetence of its own developers.
How did Manifold respond?
Manifold has at least stated it will take steps to fix things for buyers. The plan includes forever locking all v1 contract tokens, meaning those who did receive an NFT will never be able to sell them. It will then issue a new v2 contract and airdrop new NFTs for all participants in the original sale, with the exception of 430 “botters”, or users that circumvented its 1 per transaction mint limit. The botters will instead be able to reclaim the $ASH they lost using their current token holder address. Finally, it said the top 430 transactions by gas fee will receive an “additional token” from the newly minted collection. All other users whose transactions failed will be fully refunded the $ETH lost due to gas fees, Manifold said.
Despite Manifold’s promise of a refund, hundreds of users have complained on Twitter they’ve yet to receive any $ETH refund so far.
The bigger issue of course is the $ASH token dump that Manifold has so far failed to address. In what looks like a classic “pump-and-dump” fraud, Manifold first instructed users to buy $ASH to purchase the NFTs, pumping up the token’s price, then apparently dumped its own bags before the public became aware of the errors in the drop.
Twitter user @davidcash888 said the incident looks like a classic “rugpull”, the suggestion being that Manifold is guilty of committing fraud in broad daylight, causing its customers to lose thousands of dollars while attempting to cover up its own incompetence.
Manifold is yet to respond to the rug pull allegations or offer any kind of compensation to $ASH token holders.
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