New cryptos are reaching the market almost every day now. Shiba Inu was up seven million percent just a year after its launch in August 2020. The coin named after a dog and in competition with its more famous Dogecoin, exemplifies the anxiety that crypto enthusiasts go through when they sit and wonder “should I or shouldn’t I get on this early?”
Many times, it works. Bitcoin, today trading at over $60000 per coin, was once worth less than a penny. But sometimes it doesn’t work. And people who chose not to jump at the opportunity rejoice at their smart decisions while those who did, lick their wounds and hope to recover with the next new crypto blockbuster run.
Squid got squashed
A new cryptocurrency, Squid, based on the popular Netflix series, Squid Game, was making the news last week for its meteoric rise, one week after launch.
Just as quickly, its creators shut down the project and disappeared altogether from the internet, Gizmodo reported.
Inspired by the Netflix series, Squid glided on the popularity of the series, and its creators had said the currency would be used in an online playable version of the Squid Game, where users could earn more coins, that they could later cash in for real money.
The creators of the crypto coin were nowhere associated with the creators of the series or even Netflix. Looking to make a quick buck, investors bought the crypto coin and might have been elated to see its value soar to $2,856 apiece from the 1 cent at its launch.
There were red flags, such as spelling mistakes and grammatical errors on the website that was launched just a few weeks earlier. You can get a glimpse of it on the Internet Archive.
The website also took an Elon Musk tweet and used it out of context to promote its cause.
The biggest signal that something wasn’t right was that buyers of the crypto coin could not sell them. BBC reported that SQUID was available for sale on crypto exchanges such as Pancakeswap and DODO, which are decentralized but also did not do much due diligence, before listing them.
Investors are estimated to have lost a total of $3.38 million, Gizmodo reported. The value of the crypto coin plummeted from its all-time high to $0 in just a few hours.
The Mando scam
This is not the first time a series has been used to pull off a scam. Earlier this year, a crypto coin called Mando was released, inspired by another popular series called Mandalorian, which had a similar modus operandi, Gizmodo reported.
It wasn’t even six months ago that Matt Lorion, who has more than a million followers across his multiple TikTok accounts, posted a video apologizing for boosting a cryptocurrency called Mando, a Star Wars-themed bitcoin knockoff that turned out to be a scam. He admitted that he himself had lost $10,000 on the fake digital currency.
The coin was supposed to have been traded as $MANDO and those behind it claimed it was a token based on Bsc that produces a yield and deflates with every transaction.
The Mando was receiving some attention but Lorion’s backing increased the hype over this ICO substantially. The Mando website simply disappeared with the money it raised for its ICO. Its white paper was later found to be filled with extravagant claims.
The TITAN coin sinks
The token was part of an algorithmic stablecoin project called Iron Finance. Stablecoins like USDT and Binance’s BUSD maintain a peg to the dollar by holding a basket of dollar-denominated assets. Others (like Dai) are backed by overcollateralized crypto assets.
And then there’s this breed of so-called algorithmic stablecoins, which use a dual-currency structure and attempt to hold a peg by creating arbitrage opportunities between coins.
This crash actually continues a very long line of algorithmic stablecoin projects that have crashed and burned.
What triggered this collapse? According to Rekt.news, the TITAN coin had become wildly overpriced and then people began selling it, triggering a high amount of volatility, overwhelming arbitrage opportunities, and causing everyone to run to the door.
Dallas Mavericks owner Mark Cuban wrote a blog post about his enthusiasm which included this paragraph where he highlights the TITAN token:
“I’m a small LP for QuickSwap. I provide 2 different tokens (DAI/TITAN) that enable QuikSwap to offer swaps between these two tokens. As you can see here, this pair is one of many, and you can also see that based on the .25 pct of volume in this swap that Quickswap pays, my return on my initial $75k investment (based on fees only) as of this writing, is an annualized return of about 206%…”
Later, Cuban acknowledged having gotten hit like everyone else.