The Risks of Pledging APEs in NFT Pools: What You Need to Know

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

In recent years, non-fungible tokens (NFTs) have exploded in popularity as a new way to buy, sell, and trade digital assets. One aspect of NFTs that has gained attention is the use of NFT pools, where users can pool their NFTs and pledge their tokens to the pool to earn rewards.
However, security company Paidun recently disclosed on social media that pledging APEs in NFT pools and selling NFTs may come with risks that users need to be aware of. According to Paidun’s data, an arbitrageur has just purchased “Boring Ape” BAYC # 7810 and obtained 14300 pledged APEs worth approximately $60000. This has raised concerns about the security of pledging APEs in NFT pools.
In this article, we will take a closer look at the risks of pledging APEs in NFT pools and what users should know to protect themselves from potential losses.

What are APEs?

Before we delve into the risks of pledging APEs in NFT pools, let’s first define what APEs are. APEs, short for Apeiron Protocol Entities, are a type of token that is used on the Apeiron Protocol platform. The Apeiron Protocol is a decentralized protocol for NFT liquidity designed to provide more liquidity to NFTs and their underlying ERC-20 tokens.
APEs are used as collateral for liquidity provision on the Apeiron Protocol platform. Users can pledge their APEs to the platform to earn rewards, and the APEs are held in smart contracts until the liquidity provider decides to withdraw their collateral.

What are NFT Pools?

NFT pools are a relatively new concept in the world of NFTs. They are essentially a way for users to pool their NFTs together and pledge their tokens to the pool to earn rewards.
When a user pledges their NFTs to an NFT pool, they receive a certain amount of pool tokens in return. These pool tokens can later be redeemed for the underlying NFT or for other rewards, depending on the pool’s rules.

The Risks of Pledging APEs in NFT Pools

One of the main risks of pledging APEs in NFT pools is the potential for losing your pledged tokens. This can happen if an arbitrageur buys an NFT that has APEs pledged to it and then sells the NFT. When the NFT is sold, the APEs are automatically redeemed from the smart contract holding them and transferred to the buyer’s wallet, leaving the original owner’s wallet empty.
In the case of “Boring Ape” BAYC # 7810, an arbitrageur known as “0x06800a” purchased the NFT and obtained 14300 pledged APEs worth approximately $60000. This has caused concern among users who have pledged APEs in other NFT pools, as it raises the possibility that their pledged tokens could also be lost if an NFT with pledged APEs is sold.
Another risk of pledging APEs in NFT pools is the potential for fake pools or scams. While there are legitimate NFT pools out there, there have been cases where scammers have set up fake pools to trick users into pledging their tokens. It is important to do your research before pledging your APEs to any NFT pool and to only deal with reputable platforms and pools.

How to Protect Yourself

To protect yourself from the risks of pledging APEs in NFT pools, there are several steps you can take:
1. Do your research: Before pledging your APEs to any NFT pool, make sure you thoroughly research the platform and the pool. Look for reviews and feedback from other users and check the credibility of the platform and pool.
2. Be cautious: Be wary of any NFT pool that promises high returns or seems too good to be true. There are no guarantees in the world of NFTs, and high returns often come with high risks.
3. Diversify your investments: Don’t put all your eggs in one basket. Consider spreading your investments across multiple NFT pools to minimize the risk of losing all your pledged tokens if an NFT is sold.
4. Keep a close eye on your investments: Monitor your pledged APEs on a regular basis and be alert for any unusual activity or red flags.

Conclusion

Pledging APEs in NFT pools can be a lucrative way to earn rewards, but it is not without risks. Users need to be aware of the potential for losing their pledged tokens if an NFT with pledged APEs is sold and should take steps to protect themselves by doing their research, being cautious, diversifying their investments, and monitoring their investments closely.
If you are considering pledging your APEs to an NFT pool, make sure you take the time to carefully evaluate the platform and pool, and be prepared to accept the risks that come with investing in NFTs.

FAQs

1. What are APEs?
APEs, short for Apeiron Protocol Entities, are a type of token used on the Apeiron Protocol platform as collateral for liquidity provision. Users can pledge their APEs to the platform to earn rewards.
2. What are NFT pools?
NFT pools are a way for users to pool their NFTs together and pledge their tokens to the pool to earn rewards. When a user pledges their NFTs to an NFT pool, they receive a certain amount of pool tokens in return.
3. What are the risks of pledging APEs in NFT pools?
The main risks of pledging APEs in NFT pools are the potential for losing your pledged tokens if an NFT with pledged APEs is sold and the potential for fake pools or scams. Users should do their research, be cautious, diversify their investments, and monitor their investments closely to protect themselves.