A sudden rug pull by $Squid token after rising 90,000% has left investors feeling like Squid Game victims, showing the dangers of meme tokens.
- SQUID, a play to earn crypto created after the Netflix Original series gained traction after posting massive gains
- The price of SQUID jumped by more than 90,000% in one week to peak at an all-time high of $2,861.80
- After the developers publicly bailed on the project, SQUID plummeted, now trades at $0.0145
- Shutting off sales, developers of the play-to-earn game made away with approximately $3.38 million
If you didn’t watch the show, you’ve surely seen its influence in some freaky Halloween costumes last week. Yes, the year 2021 seems to belong to Squid Game – the wildly successful Korean hit series on Netflix based on a deadly tournament of children’s game hit streaming services in September. By October, Squid Game was already ranked as the most-viewed series on Netflix.
Following the success of the Netflix series, some developers thought to replicate the story in the cryptoverse. Squid Game (SQUID) was created as a play-to-earn token. The SQUID token was to serve as the pass into the blockchain game. Similar to the series, winners of online games get more tokens.
Although stating that SQUID shared no ties with the dystopian Netflix series, developers of this project built the game around the show. In addition, to further gain the trust of the public, the developers explained that the project was built using “innovative” anti-dumping technology that prevented people from selling their coins if there are not enough being bought.
Soon enough though, reality proved to be as strange as fiction, with the token mimicking the cruel and unusual deadly punishment meted out to its more than willing victims who were blinded by greed.
Unsurprisingly for any experienced DeFi “degen” who dabbles in yield farming and liquidity mining, the $SQUID token, which soared up to nearly $3,000 at its peak, unexpectedly plummeted to its demise. Much like some unlucky participants during a couple of “games” ( Tug of War and Glass Floor) from the show…
This came after the meme coin’s developers did a “rug pull” on the project and stole all the funds. Sadly, this is just another day in crypto if you’ve been here longer than a few months, and part of a vicious cycle that constantly reinvents itself in order to exploit hapless and greedy crypto investors.
How did the $Squid token scam work?
Players needed to present a specific number to play or to restart the game if they failed. Entry fees range from 650 tokens to 15,000. Of those entry fees in games, 10% is sent to the token’s developers, with the rest making up the award pool for the winner of the game.
The idea behind the play-to-earn game was intriguing. And, Just as the Korean Netflix show topped charts from nothing, so did Squid Game (SQUID) break the charts. Even before the official launch, the price of SQUID has jumped by more than 90,000% in one week.
SQUID was listed on CoinMarketCap at a price of $0.01229 on October 26. However, by November 1, SQUID was valued as high as $2,861.80, putting it up there with Shiba Inu gains for the last 12 months. For a project that was yet to Launch, SQUID gained more popularity and attention than some decade-old Cryptocurrencies.
The Squid Game crypto was scheduled to go live in November, with gamers already acquiring the coins to prepare for the competition. However, as we all got to know, the creators of the crypto had other plans in mind.
Squid Game Over: The Rug Pull
Because the project never launched, holders could not sell the tokens on decentralized exchanges, eventually leaving many investors with worthless SQUID coins after they plummeted to nearly zero.
From a high of $2,861.80 on November 1, SQUID is now valued at $0.0145. Before its drop to zero, the project had amassed approximately $3.38 million. The developers of Squid Game Crypto had rug pulled! A rug pull describes a scenario where the crypto developers abandon the project and run away with investors’ funds.
The developers turned on the project after pocketing the money from their investors. The developers wrote;
“Squid Game Dev does not want to continue running the project as we are depressed from the scammers and is overwhelmed with stress.”
They were able to pull this off by stopping sales of the token on PancakeSwap while artificially inflating the price of SQUID. Investors looking to cash out on a spiking coin pumped in more funds into the project while sales were still shut off. Eventually, the scammers behind the project bailed.
What can we learn from the Squid Game meme token scam?
The news about SQUID’s rug pull has cost the life savings of one investor in Shanghai. Following the success of the project, Bernard decided to invest his entire life savings of $28,000 into SQUID. He said;
“My rush to buy this token is for a single idea that went into my brain that ‘Squid Game’ is very, very popular now, and its token must be popular now,”
Bernard’s story could hold true for many other unknown investors around the world. But, could this tragedy have been prevented? What can we learn from the rapid rise and fall of the Squid Game Crypto?
Crypto lesson: Be careful with meme tokens
In 2021, the crypto industry and investors have become more focused on pumping coins than on projects that solve real problems. So-called meme tokens, coins like SQUID that have little to no utility, anonymous developers and which rapidly rise, can be quick to catch investors’ fancy, leading to wildly inflated valuations. Unfortunately, these coins are more prone to rug pulls than actual projects. At the very least, when interest begins to wane, so does the price, and normally a price drop soon turns all-out panic as inexperienced investors clamour to get their funds out in time.
Investors could use the Squid Game saga as a cue to chase real projects verified by real individuals supporting the development. While all cryptocurrencies are risky, meme coins pose more risk to investors and should be avoided, unless you can get really early and believe the coin can capture mainstream attention.
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