The Ethereum Project Airdrops a Scam Token and Then Flees

Earlier afternoon, a new startup called EtherWrapped airdropped a coin and then performed a rug pull on its community.

Earlier this morning, a new startup called EtherWrapped released a token airdrop to provide Ethereum users with insights on their transaction history. From 02:30 UTC, eligible Ethereum users may obtain the project’s YEAR token. Tokens were distributed according on users’ on-chain behaviour, with more active users receiving a greater number of tokens.

From a now-deleted Twitter account, EtherWrapped announced the airdrop. Additionally, the team, whose names are unknown, confirmed the token contract on Etherscan, giving it the appearance of legitimacy. It also coincided with the introduction of two airdrops from OpenDAO and GasDAO during the previous week, potentially in an attempt to profit on the continuing buzz for new tokens. YEAR was quickly accessible for trading on the decentralised market Uniswap after over 4,500 people claimed the airdrop.

At about 06:00 UTC, four hours after the token’s debut, the token’s price dropped to virtually zero. Following the event, numerous people alleged that the team used a so-called “bait-and-switch” operation to pull the rug. Jordan Spence, CMO of MyCrypto, was among the first to notice the occurrence. “It seems to be $YEAR, but more tough. I am unable to sell or send. “I am only able to purchase,” he tweeted at 06:15 UTC.

A “rug pull” is a common cryptocurrency word that refers to instances in which teams quit their projects and steal their investors’ money. Rug pulls are extremely prevalent in DeFi; malevolent enterprises often sell a huge chunk of their token supply after establishing an investor community, and the abrupt absence of liquidity on decentralised exchanges leads the token price to fall.

The designers of the token contract concealed a smart contract function named “revoke ownership” in this instance. The designers designated the Uniswap V2 contract address as the new owner, thereby locking holders out of the ability to sell their allotment. This action established a “honeypot” dynamic, in which traders could still purchase the token but could not sell it. As a consequence, the token’s price increased, attracting further purchasers. Soon thereafter, the EtherWrapped crew sold their tokens and made off with almost 30 ETH in a series of transactions.

The event is reminiscent of several similar DeFi rug pulls this year. In October, another malevolent team capitalised on the popularity of the Netflix series Squid Game by launching a coin called SQUID and then selling the remaining supply when it surged 300,000 percent in a week. The coin lost 99.99% of its value, yet the team earned around $12 million.

This time, YEAR plummeted from roughly $0.0007 to virtually nothing. Additionally, the EtherWrapped crew has vanished and removed all of its social media accounts.

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