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bitconnect

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:

Not sustainable.

And here was the interest rate just two hours later:

Still not sustainable.

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).

Yeah, it’s a scam.

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.

Rug Pull Imminent…

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

5pm, Central Time (US), APY

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:

It’s coming…

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):

That’s a big drop, eh?

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

It keeps on dropping…

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.

Written by David Van de Walle · Categorized: CAPY, Uncategorized · Tagged: bitconnect, rekt, rug pull

May 30 2017

When Bitcoin Volatility Is Your Friend

How ya holdin’ up there, kiddo? Enjoying the markets? Did you find the thrill ride known as Bitcoin to be exciting? Are you still in okay shape?

Crazy BTC

Still doing okay? (And if you’re still new to all this, hop on over here to this post and learn all about how to get started.)

Your mood might depend upon a few variables. First of all, whether you believe long-term in Bitcoin (which we’ll use in this post as the catch-all currency) and what it means for the economy. If you do believe, you may have bought in at lower numbers than what’s above. And, if you did, you probably didn’t look to sell at the first opportunity.

Another mood enhancer may be whether or not you tried to buy the dips. BTC at close to $2700 (above chart from Poloniex, so your experience and trading platform may vary) wouldn’t have given you a dip opportunity, but BTC dropping into the $1900s, then $1800s, then below? Any of those would have been buying opportunities for the long-term trader.

If you think Bitcoin is going to $5000 this year, then $2000 is a buying opportunity. $1538 is a golden buying opportunity.

Finally, again here’s our magic word: “Fundamentals.” The fundamentals of Bitcoin are strong, in our opinion here at Metacoin (that link is to our Facebook account and we would love your “likes”), so we’re bound to look at these moves as means of testing our hypotheses. Is Bitcoin strong enough to weather a drop into the $1500s? Does the volatility actually work in our favor – weeding out “panic sellers,” and bringing in long-term investors?

If there were a “State of the Union” for Bitcoin, we think that moving from a May 1 price of $1435 to today’s price of $2200 or so means that the state of Bitcoin is strong. Volatile, sure…but strong.

Leveraging Volatility Through Bitconnect

One more thing about volatility, and this last part is an Affiliate Link; since this whole site is a learning experience, we’re planning on…learning together.

We’ve just signed up at Bitconnect, and it’s a rather unique program. You lend Bitcoin through their platform, they trade it, using highly specialized bots and algorithms to use volatility to your advantage. The interest rates are compelling as heck – compounding daily at a half a percent can mean that money starts to add up quickly.

You can sign up for free – use the link above so this site gets credit, and we’ll get a bonus for your signup, should you eventually lend some of your hard-earned Bitcoin.

Our plan is to start lending in the next several days, then kick back and track the results. It could get pretty interesting – and we’ll share our results, warts and all.

Til then, stay strong.

 

Written by David Van de Walle · Categorized: Bitcoin, Bitconnect · Tagged: Bitcoin, bitconnect

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