ZachXBT’s NFT Accidentally Becomes $15M Meme Coin

Blockchain investigator ZachXBT’s NFT project unexpectedly transformed into a $15 million meme coin due to the Zora protocol’s auto-generated ERC-20 token feature. Initially, ZachXBT aimed only to archive his investigation on the blockchain, but instead, his NFT project spurred speculation and high trading activity, creating an unintentional meme coin on the Base network. This incident has raised concerns around automation in DeFi and NFT platforms, where unexpected liquidity generation can turn assets into tradable coins.

The controversy started when ZachXBT minted NFTs on Zora to document his findings in a $243 million theft investigation involving a Genesis creditor. His intention was to create a free, permanent digital archive, but he did not realize that Zora’s interface would automatically generate a tradable ERC-20 token upon minting. This turned his NFTs into liquid assets available for trading on decentralized exchanges like Uniswap, catching him by surprise. He stated on X that Zora’s interface did not indicate that minting NFTs would also launch ERC-20 tokens, a lack of transparency he highlighted by sharing screenshots of the platform.

In response to the unwanted trading, ZachXBT warned he might take steps to discourage further speculation, such as replacing his artwork with a blank image or diluting it with additional mints without an end date. Zora’s ERC-20z standard allows NFTs to be wrapped as ERC-20 tokens, creating instant liquidity for open-edition NFTs, intended to simplify asset trading for creators. However, this automated liquidity feature can have unintended consequences, as seen in ZachXBT’s case, where his investigative project became a meme coin without his consent.

The initial mint of ZachXBT’s token produced around 3,500 units, with additional tokens created to establish a liquidity pool (LP) on the Base network. Following the mint, the tokens and part of the Ethereum (ETH) revenue were locked into this LP. Originally valued under $10,000, the token’s market cap skyrocketed to $15 million as traders and enthusiasts took notice. The situation soon drew both excitement and skepticism, with some crypto users establishing a social media presence, memes, and even a Telegram group for the token. They also bridged it to the Solana blockchain to expand trading options.

Many were intrigued by the link to ZachXBT’s investigative work, viewing the token as part of blockchain culture. However, not all responses were positive. Some questioned whether ZachXBT had been fully aware of Zora’s ERC-20z standard or if he had intentionally allowed the creation of a tradeable asset. The incident illustrates the potential pitfalls of DeFi and NFT platforms with unclear interfaces, where automatic settings can turn projects into financial instruments without creators’ knowledge. ZachXBT reiterated that his sole aim was to archive his work on the blockchain, not create a speculative asset.

This situation reflects broader issues in the NFT and DeFi landscape, where automatic liquidity solutions and tradable standards can lead to unintended consequences. ZachXBT, known for exposing fraud in the crypto world, finds himself associated with the meme-coin trend, a volatile and speculative area. For Zora, this incident could encourage them to reconsider how they communicate new standards to users, as the ERC-20z model, while beneficial for liquidity, requires clearer guidelines for those unfamiliar with its implications.