Airdrop Hunters II
The hunters have become the hunted.
There’s money to be made in giving money away.
Over the last few weeks, various airdrops have gained huge amounts of attention despite none of them creating anything noteworthy.
But can the creators of these coins expect to bootstrap a lasting community with no real product of their own?
Even established protocols have trouble maintaining their token price after an airdrop.
Chart by @cptn3m0x
It’s no surprise then, that “projects” such as $SOS and $GAS are down so bad (~73% and 95%, respectively) when they launch a token with no product of their own.
Then came the actively malicious $MASK scam, capitalising on the hype generated by the above examples, and speculation on whether MetaMask would release its own token.
The scammer was able to manipulate DEXTools into showing a blue tick verification and pop-up which displayed the token as legitimate. After users piled in, 462 ETH was pulled from the Uni v2 pool. The contract also included fees on transfer which were sent directly to this address. 127 ETH of which have since been sent on to another address, and then to Tornado Cash.
This week, a lot of hype and FOMO was created around the launch of a token for the site fees.wtf.
Users were to be able to claim $WTF based on their existing gas expenditure, as well as an NFT of the same information which will grant access to a pro version of the site in the future.
As expected, the launch turned into a ‘shitshow’.
Firstly, before claiming went live, many had qualms about the unlock fee (plus gas for the extra transaction) necessary to claim, as well as the token contract’s design.
The unlock fee of 0.01 ETH goes directly to the team’s wallet (over 175 ETH or ~$500k so far) unless split via the referral scheme. After claiming, users can generate a link to share a portion of further fees with the team, depending on the amount of $WTF they have burned.
The token itself also contains a transfer fee, currently 4% but adjustable up to 10%. This is split mainly between different rewards mechanisms for WTF holders, stakers and LPs, but with 5% of the fee (0.2% of the transfer amount) going to the treasury.
On top of the above fees, the team’s donation address had already cashed out $500k.
The chaos following the launch saw some bots win big (58 ETH) and some users get severely rekt (42 ETH, 22 ETH) in the slippery Uniswap V2 pool, which was seeded with just 2.2k WTF and 0.000001 ETH.
The post-mortem of the incident states that the team later added 20 ETH, to avoid getting rekt by bots in the first minutes, happy to leave the early losses to be absorbed by user-supplied liquidity instead.
At the time of writing, $WTF is down 67%, less than 36 hrs after launch.
The community has taken offense to almost every element of this project. The extra transactions necessary to claim, plus an additional NFT bundled in all end up adding to gas fees...wtf were they thinking?
However, as stated in the post-mortem, the fees.wtf team “delivered exactly what [they] were offering”, and it’s hard to argue with that.
The contracts were verified and announced in advance of claiming going live, giving users time to vet them and decide whether to participate.
As so often happens, FOMO and greed reached a critical mass, and in the ensuing feeding frenzy, some were bound to get bitten.
At least fees.wtf will be remembered for their fees…
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