David Van de Walle

Oct 05 2020

Anatomy of a Rug Pull

We saw this one coming a mile away: Apy.center was what is known as a “rug pull.” Investors saw the rug pulled out from under them, and, unless you were one of the early ones, your money is pretty much gone.

So…what happened?

I don’t think “.pull” is a TLD extension…

Step One: The Recruitment

It launched sometime early in the morning Friday, October 2, as a yield farm on steroids. In the interest of public service — we should note that we’ve done a few experiments like this during our three years blogging here — we decided to gamble what amounted to a family fast food meal on the Uniswap Pool behind $CAPY. We were also investing in a platform that was roughly 12 hours old.

We were 12 hours too late.

Here was the interest rate promised when we got in:

And here was the interest rate just two hours later:

Step Two: The Contract’s 72-Hour Rule (i.e. The Setup)

This is where everyone who was recruited into this fast-growing pool saw stars in their eyes: your money is locked for 72 hours. You can’t get any of the gains out til then, so you have no choice but to watch and wait and hope and pray that the rug won’t get pulled out from under you.

New money was indeed flowing in, to the tune of a half-million TVL (total value locked) by Saturday morning (36 hours after launch).

One of the fastest-growing Telegram channels we’ve ever seen served as an additional recruitment tool, with more money flowing in and, at around the same time of the above snapshot, interest rates promised that were still huge.

The clock/time bomb was ticking, but Sunday still saw huge POTENTIAL returns:

With the first investors just a few hours away from being able to take their investments out, it was just a matter of time. Here’s a TVL snapshot from Sunday evening, US Central Time:

And here’s this morning’s post-rug-pull TVL snapshot (we slept in til 6:15, since we were powerless to stop any movement; our funds were locked so the only potential gains, all on paper, weren’t real):

AND, just moments ago, 9:25 a.m. Central Time in the US:

What Have We Learned?

Chasing quick returns? That’s human nature. Looking at nutty interest rates that seem impossible, you may have succumbed to the masses: “I want some of that.”

The creators of this mystery coin set it up in such a way that, while the code appeared to be air-tight, there was no possible way to make any money unless you were one of the first users. No one in their right mind was going to hold onto their gains for any longer than they had to, and the new money that went in was obviously going to pay the old money that was in first. The first few investors — who were likely also the creators of this coin — played psychology, word-of-mouth marketing, and the lure of insane, out-of-this-world returns to get new investors on board fast enough to ensure that maybe the first 5 investors were getting mass profits.

It’s a classic Ponzi scheme.

Again, DYOR, and Don’t Be Surprised if You Get #REKT.

Be careful out there, folks.

Oct 01 2020

More DeFi Food: A Deep Dive into (A Plate Full of) TACOs

Really, #DeFi developers, do all of these things HAVE TO BE NAMED AFTER FOOD?

Well, they don’t HAVE to be, but it appears that some of the more interesting concepts in DeFi (Decentralized Finance) actually are named after food. Like $TACO, a platform that we learned about when we were trading $SHRIMP and $SUSHI.

More Than a Cute Logo and a Clever Name

TACOs has turned their brand of deflationary token launch into a game. They have set aside a large chunk of the token supply to be burned: 6 percent of the Uniswap pool gets torched daily.

(Nobody likes to eat burned tacos, but…)

Hey, this does appear to be sorta clever: no more TACOs can be created, and the supply gets “crunched” so that your TACOs become more valuable over time.

It works like this, and we were able to confirm through a couple of “trades” of our own yesterday:

You decide if you want to “crunch” the outstanding tokens and claim 10 percent of the amount being crunched;
You pay the gas — we paid $3.12 on one of our transactions yesterday — and have to calculate whether the gas makes up for the value of the tokens;
You make the transaction and see the 10 percent in your wallet.

But here’s where it gets interesting: you may decide that the gas price is totally worth it, despite only getting (in the above scenario) 42 tokens added to your balance. Given the recent price of just short of 7 cents per token, you’re paying a little more than $3 to get 42 tokens. SO you’ve covered your costs.

In another case, when we decided to say “what the heck?,” we paid 10 cents a token for another 60. We think there’s potential with this platform — in fact, we did the math and the burn rate — or “crunch rate,” even “crunch rate supreme” — might mean that supply gets tremendously sliced over the next month.

This means that on Day 30, $TACO has nearly half of its coins destroyed.

OR…if you check the contract, you realize it’s not moving THAT quickly…

It’s still early and there are some kinks to work out — and the website itself is a little murky on details. BUT, if you’re willing to play a game, and don’t mind the potential that you could be playing a game that could be worthless, spend a little time with a plate full of TACOs.

Sep 28 2020

Shrimping Experiment: Time to Roll the Dice

As fate would have it, we now have the opportunity to shift one of our DeFi experiments from the world of food — or at least tokens that are named after food — to the world of gambling.

Yes, it’s time to roll the dice. Literally: we’re going to move our $SHRIMP to $DICE.

The Shrimp.finance team announced overnight (our time; we’re on Central Time, USA) that they were moving their development efforts to Dice.finance; you can read what they said on Medium here.

How This Could Impact You…

If we’re correct in our research — and based on what we’ve learned talking to others who have followed both $SHRIMP and $DICE — this amounts to a “burn” of the Shrimp token. And you can take it directly from the blog post:

Fair enough.

As the Medium post tells us, if you had Shrimp, they’ll buy it back at $2.50 each. The buyback, though, is in $DICE, which you need to leave on the platform for six months in order to get rewards — which will be on top of the value of the tokens you deposit.

Betting on Horse…or Jockey?

In our opinion, you’re betting a little on the horse — if you’re in the USA, for instance, you know how prevalent all kinds of gambling are — but a lot on the jockey: XiXi Huang.

Cute Logo.

Huang appears to be a rather innovative character, and he’s somewhat active on Telegram; his interest in making this move appears to be driven by the desire to focus on the growing gambling sector, and the location of Dice (Macau).

The Dice price, though, is pegged for this swap at $165; that’s a far cry from the trading value earlier this morning of $56.25.

Dice Price is Nice (Today, at least, if you’re a HODLer).

Next Steps?

We will keep you posted; we’re still investigating the opportunities here and still processing how to move things from our meager Shrimp holdings.

Again, stay safe, do your own research, and be prepared to watch any of these projects go belly up, too. That’s always a risk — though we hope you hit it big with one of these, it’s possible that you could get rekt, too.

Final Note: A Warning About Dice on YoBit

You can find a few coins marked “DICE” out there; one such is the DICE that were awarded to YoBit users. Be sure you’re looking in the right place for your Dice. Visit the buyback site from Dice itself here: buyback.dice.finance.

Sep 24 2020

Could Dego Be the Next Big Thing?

We just learned about another one, and this #DeFi development brings an element of NFT trading, art, and…LEGOs*!

* one thing we’ve noticed is that there doesn’t appear to be an official Lego connection. However, there’s an NFT that COULD be Lego-esque. We’re still trying to sort through that…Anyway, on with the post!

What Problem Are You Trying to Solve?

Back in our corporate days, we worked with a really smart guy who said that phrase a lot. It’s a great question, and, at first glance, it might appear that $DEGO is trying to solve a problem that doesn’t exist: how do you merge Legos and #DeFi?

But, dear reader, that is not the point; and, given this take here on their Github-style page thingy, we believe this one could be trying to solve a few problems.

OR, this could be trying to bite off way more than it can chew.

Price, Supply, and Whatnot

21 million tokens will be available, and, as of this writing (Sept 24, early afternoon, Central Time in the US), $DEGO was trading at 73 cents.

Right Now, It’s About Two Things…

All of these coins, tokens, platforms, and whatzits are all working on a combination of HYPE and HOPE.

Dego is trying to get the hype through a really cool UI; see the screener below and tell us it’s not just being a Windows 95 clone.

The HOPE comes from the launch of a couple things, like a liquidity pool (which is here now) and eventual Binance smart chain launch, lending and insurance.

Again, we’ll watch for more…and we encourage you to DO YOUR OWN RESEARCH. These are highly speculative investments.

OH, and here’s a CLEARLY IDENTIFIED AFFILIATE LINK: Dego Affiliate Link. Check it out for yourself and good luck!

Sep 23 2020

DeFi Fever: Catch It!

If you’re having a hard time keeping up with all of the DeFi (Decentralized Finance) developments, don’t fret: so are we.

Seriously: we saw a thing on Telegram inviting us to join Pancake and we, too, were wondering WHY DO THEY ALL HAVE TO BE ABOUT FOOD!

Alas and alack, here are three more DeFi platforms to consider; though one isn’t about food and, to readers of this space, won’t be a complete mystery.

REMINDER: Do your own research. We’re not responsible for your success or failure. We hope you get rich and make mad bank, but you could also get rekt. Seriously, study this stuff closely — and be prepared to lose your entire investment.

Pickle: Does It Do Anything Interesting?

Pickle announced its intentions in a Sept. 10 post on Medium: “to bring stablecoins closer to their pegs using farming incentives, vaults, and governance.”

About that “off peg bad” stuff, here, from the Medium post, is the team’s motivation:

So there you have it…stability! A more stable stablecoin for a better world!

Or something like that…with the volatility in the first eleven days, it may take some time for the “peg” to be, well, pegged.

Watch this space for more developments; we haven’t invested in $PICKLE yet, but some of our DeFi “degenerate” colleagues have.

How About Pancakes?

This one comes with a couple asterisks: $CAKE is too new to rank on CoinGecko yet and it’s also on the Binance platform. The latter means that we can’t experiment with it yet at HQ because we don’t have any assets on the Binance platform.

ALSO…

In addition to wondering why these all look the same, this one doesn’t inspire a ton of confidence yet:

Once they get the “test” off of the site, we’ll let you know what we learn.

Biggest Non-Food DeFi Development: MCP3D’s $MEGA

This probably deserves its own blog post; but we wanted to make sure this got out before what could become a feeding frenzy.

MegaCryptoPolis, MCP3D for short, is a gaming platform that’s like the Sims. We have written about it a few times in the past; and in this post we felt like we were one of the early adopters on the cusp of something that was about to become huge. Well, the economy within MCP3D lets you use resources to build things, and you can create those resources by actions of your citizens (say, getting one of them to run a power plant).

That economy will soon — as early as tomorrow — let you trade these resources, put them into a vault, and collect the $MEGA token. You can read about these developments in the company’s post on Medium.

We’ve been a fan of this for quite some time — there’s tremendous potential if you’re into the gamification of these crypto communities, and combining the DeFi world with the Sims-type world may be huge.

Or MEGA.

Again, watch this space for more developments and, if you’ve got something to share in this world, let us know!

As always, stay safe out there. DYOR.