A crypto token known as Snowdog, which was presenting itself as a ‘Shiba Inu killer’ appears to be the latest crypto scam that has conned users circa $20 million as the price fell from $1,500 to $100 within minutes today. The founders had urged investors to buy and stake their SDOG tokens as an investment and they would then buy them back with huge profits in 8 days. None of that took place as Thursday dawned.
Details are immerging on how this rug pull happened even as many users cry foul on how they were scammed.
The crypto is a meme token. Today, the owners have explained in a blog post that this happening is not a rug pull but it was a game theory experiment they organized, all with a purpose to promote their project and create a buzz around it.
They said holders of the token had a choice to sell SDOG tokens before the buyback event or compete with others to sell during the buyback at the highest price. This was included as part of their instructions. Only a few managed to sell at the highest price of $1,500 during the buyback after which the price has tumbled. But instead of creating a buzz and boosting the price as investors had expected, the price fell to $100 to the frustration of many.
“We understand that the buyback experience created frustration as only 7 percent of the supply holders would benefit from a price superior to the market price before the buyback. We deeply regret not having communicated more on this. We should have warned the community about the risks that waiting for the buyback to sell represented.”
During the 8 days when users were buying and staking their SDOG expecting the token to pump during and after the buyback event that was well published on social media, the project collected $44 million to use as buyback power. The creators had promised to develop a DEX that would only be revealed and used when the buyback opens.
After launching the DEX, in 15 seconds, 1,576 $SDOG was already swapped for the MIM token also belonging to the group. But the SDOG market price dropped terribly in 36 seconds of opening the buyback.
“We recognize that Snowdog created confusion and misalignment around what the priority is for Snowbank. A huge part of why we are doing this is because of our amazing community. From now on, every new product or service launch will be submitted to a vote by $SB holders. We want to make sure that our holders are aligned with the priorities the team wants to pursue.”
They stated in the post that the project is currently sitting on $40 million of reserve funds and have gone ahead to publish additional details on how to proceed with the project.
Last week the token was valued at $6,030 and has been on a massive downtrend.
The new DEX known as Trader Joe is still operational. Although the developers say this was not a scam or rug pull event but one to create a buzz around the project given the attention that rug pull projects garner, the project still appears suspicious.
One user said on a Discord chat that an account belonging to one developer or owner appeared to be so much informed about the smart contracts and the Trader Joe platform had been funded with Ethereum from FTX_Official which was bridged to the Avalance blockchain on which Snowdog is hosted.
The said developer or owner reportedly approved the SDOG for trading instantly when the DEX launched. This happened before the team even shared the contract address anywhere else. The post raised suspicion that the owners or developers had clearly benefited from the claimed buyback.