PRViously on Crypto: Another rug pull event on Ethereum blockchain, Crypto will be hot in 2022 according to Race Capital CEO
Ethereum Project Airdrops Scam Token, Then Pulls the Rug
Another rug has been pulled in Ethereum’s DeFi ecosystem.
EtherWrapped, a new business that provides Ethereum users with insights on their transaction history, conducted a token airdrop. From 02:30 UTC, eligible Ethereum users could claim the project’s YEAR token. Tokens were distributed according to users’ on-chain behavior, with more active users receiving more tokens.
EtherWrapped announced the airdrop on Twitter, which has since been removed. The team, whose names are unknown, also confirmed the token contract on Etherscan, giving it the appearance of legitimacy. It also came on the heels of two airdrops from OpenDAO and GasDAO that took place in the previous week, potentially in an attempt to capitalize on the continuing enthusiasm for new tokens. YEAR was quickly accessible to trade on the decentralized market Uniswap after over 4,500 individuals claimed the airdrop.
At roughly 06:00 UTC, four hours after the token’s debut, the token’s price plummeted to virtually zero. Several people stated that the team pulled a rug using a “bait-and-switch” operation following the event. Jordan Spence, CMO at MyCrypto, was among the first to notice the occurrence. “Looks like $YEAR is just rough.” Cannot sell or transmit. At 06:15 UTC, he tweeted, “Can only purchase.”
A “rug pull” is a common crypto word that refers to events in which teams quit their projects and steal their investors’ monies. Rug pulls are very widespread in DeFi; malevolent enterprises frequently sell a huge percentage of their token supply after establishing a community of investors, and the abrupt removal of liquidity on decentralized exchanges leads the token price to plummet.
The token contract designers disguised a smart contract mechanism named “revokeOwnership” in this occurrence, making the Uniswap V2 contract address the new owner, preventing holders from selling their allocation. This act established a “honeypot” dynamic in which traders could still purchase but not sell the token. As a result, the token’s value increased, attracting additional purchasers. Soon after, the EtherWrapped team sold their tokens and made around 30 ETH in multiple transactions.
The event is comparable to previous DeFi rug pulls that have occurred this year. Another malevolent company utilized the success of the Netflix series Squid Game in October to introduce the SQUID token, then sold the supply after it had risen 300,000 percent in a week. The token lost 99.99 percent of its value, yet the team profited by roughly $12 million.
YEAR fell from a price of roughly $0.0007 to near nil this time. The EtherWrapped staff has likewise vanished, and all of its social media outlets have been erased.
According to Race Capital CEO, cryptocurrency will be “extremely hot” in 2022.
Since interest rates have been climbing, crypto investors will be keeping a close eye on the market as it moves towards 2022 to see how it performs.
Alfred Chuang, managing partner and founder of Race Capital, spoke with CNBC about his cryptocurrency prognosis for 2022.
Simply looking at trading volumes for cryptocurrencies between 2020 and 2021, Chuang saw that trade volumes increased from roughly $50 billion per day to $100 billion per day, while the overall Nasdaq trading volume stayed nearly constant at $200 billion throughout the year.
With the growth in trade volume highlighting the rise in Web3 participation and Web3’s long-term survival in mind, he indicated it’s fair to anticipate the whole cryptocurrency business, including Bitcoin (BTC), to be widespread in 2022.
“So I think as we’ve seen more participation in Web3, and Web3 is here to stay, you can only imagine all of crypto is going to be very hot going into 2022, let alone Bitcoin itself.”