While SnowdogDAO (SDOG) gained huge popularity for being the first meme coin on Avalanche Network, its price went down by over 90% this Sunday following an eight-day long live event. Investors lost a massive amount of funds, with a person losing more than $600,000 and are calling it the platform’s biggest rug pull.
After an eight-day long function, SDOG was scheduled to end with a huge buyback opportunity enabling users to compete for a share of the funds. The buyback was said to be financed by the assets of the Snowdog treasury via mint sale, whose market value increased to $44 million in just eight days.
The primary factor for the massive loss is that just 7% of the SDOG supply was allowed to be sold above market value before the buyback. The developers of the token, however, restrained themselves from disclosing this to the community.
How did the Snowdog price go down?
A single wallet grabbed nearly $10 million by moving Snowdog for other tokens, reducing the treasury’s buyback power by over 25%. The wallet bought nearly $180,000 worth of SDOG just before the buyback event with MIM and later drained over $10million worth of MIM. Besides that, two more addresses drained around $7.7 million and $3.3 million using the same method.
Notably, before this, the Federal Bureau of Investigation or FBI issued a warning against crypto scams while it is closely looking into these matters.
Many believe that the 7% mark was just the founders’ plan to take all investors’ money. Snowdog’s developers, on the contrary, stated that they deeply regret that they didn’t make it investors clear about the underlying risks about the same.
However, the statement does not seem convincing enough for the investors who lost all their funds and believe that it was all pre-planned. One should always research before putting our hard-earned money on any project. Here’s how you can avoid and protect yourself from fraudulent schemes.