Snowdog Rug Pull: The “first” memecoin, and supposed “Shib Killer,” rug pulled its holders. Hardly anyone is surprised. Find out why.  Covered: Snowdog Rug Pull SDOG Buzz Snowdog Mortem: No One’s Buying It Snowdog Rug Pull This weekend, the largest rug pull in the history of Avalanche has rocked the network and it’s users. SDOG, […] The post Snowdog Rug Pull Rocks Avalanche: What Happened appeared first on CryptosRus.

Snowdog Rug Pull Rocks Avalanche: What Happened

Snowdog Rug Pull: The “first” memecoin, and supposed “Shib Killer,” rug pulled its holders. Hardly anyone is surprised. Find out why. 

Covered:

  • Snowdog Rug Pull
  • SDOG Buzz
  • Snowdog Mortem: No One’s Buying It

Snowdog Rug Pull

This weekend, the largest rug pull in the history of Avalanche has rocked the network and it’s users. SDOG, the first meme coin launched on Avalanche was rugged for $10 million, with the team admitting they had “f**ked up.” Yet on the other hand, they are calling it a “game theory experiment” gone wrong.

Snowdog DAO was the protocol behind the SDOG token which, at press time, lost over 90% of its value. It was a complex scheme which involved insiders exploiting a “challengekey” in the smart contract which only they had access to.

The coin and the project were only eight days old before the rug pull occurred. It was actually launched as an eight-day “experiment” that was supposed to end with a massive buyback of SDOG tokens. However, an insider who knew the challengekey, which was part of the SnowdogDAO contract, backran the buyback. Because the insider had what was essentially a password, they were able to dump the coin at their earliest convenience.

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SDOG Buzz

The prospect of the buyback generated buzz in the Avalanche community, and remarkably, the coin reached a price of $6,819 on November 18th. The buyback was supposed to be financed by the Snowdog treasury generated through mint sales.

In those eight days, the treasury grew to $44 million dollars. Holders of SDOG thought that they would have a chance to earn some of those millions when the buyback was supposed to occur.

What the protocol failed to disclose to buyers of SDOG was that only 7% of the SDOG supply was “eligible to be sold” above market price before the buyback. Snowdog devs ironically tweeted out before the buyback that they were afraid that they could lose money due to a bot exploit.

To mitigate this, they copy/pasted code from Uniswap and built an AMM where this challengekey was added to the contract to prevent the theft.

However, when the AMM launched and the entire SDOG liquidity was migrated from the Trader Joe DEX, the insider with the challengekey liquidated most of the treasury which was supposed to be used for the buyback.

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Snowdog Post-Mortem: No One’s Buying It

Snowdog released a post-mortem which claimed there was no funny business. All indications point to this being false. They even had the audacity to say — despite the fact that everything is viewable on-chain — that the challengekey concept worked. They claimed that bot behavior resulted in failed transactions because of the key. But the opposite is true.

When users went to trade their SDOG on the new AMM it required this key to execute the contract, which of course, no one had but the insiders.

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The team claims they are still moving forward with the token which has lost most of its value, including governance. However, it is clear that no one is buying the story that this wasn’t a planned soft-rug. It’s clear that many speculated a rug was afoot, but we’re waiting for the buyback, hoping for a juicy return.

The buyback and burn concept sounded good, and many thought this would be their golden ticket. But when it sounds too good to be true, it usually is. As one anonymous Twitter user said, “Oh well. Onto the next ponzi.”

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