Another crazy virtual currency scam came to an end.
After the global popularity of the Netflix web series "Squid Game", it has become the wealth password of many merchants. Some sell the same clothes, some sell the same kind of candy, and even peripheral digital currencies have been launched.
A "squid coin" named after the brand began to soar after its release, with a maximum increase of nearly 2400 times in the past week, and the price of the coin reached a staggering $2861.8 (about 18309 yuan).
Then it collapsed, and EST fell back to zero on Monday morning.
One investor witnessed the crash live.
01
The hot squid coin rose sharply after its issuance
The cryptocurrency, called Squid Coin, is an exclusive token for a gaming platform of the same name as Squid Games. The platform mimics the six rounds of matches in the TV series, where the prize money the winner receives will be paid in the form of squid coins.
"Squid Game" poster, source: Douban
However, the squid coin clearly stated in its release document: "We have nothing to do with Netflix's Squid Game." ”
The platform also said: "We obviously don't provide fatal consequences!" Also, the grand prize in the show is capped at $38.5 million, and this simulated game will not limit the final prize money or the number of participants.
But this squid coin, in terms of gameplay, does inject a new idea into the coin circle: players can buy game tokens for online games, compete in online games that began in November, and spend squid coins for each game they participate in.
According to the squid coin issuance document description, for every squid coin you buy, the developer will charge a 10% entrance fee and then inject the remaining 90% into the prize pool. The more people who join, the larger the prize pool for squid coins.
There are also six rounds of the squid game in the coin circle, and the entrance fee for each round is different, the first round is the cheapest, the second round of participation is doubled, and so on. As the game progresses, the higher the cost of the player who wants to participate in the game. The winner will receive all the prize money in the prize pool.
Some rounds also require the user to purchase a custom nft (non-homogenized token, similar to a game skin or item in this game) sold on the platform. Some of these NFTs feature characters from the show, including guards in red suits and black masks.
According to the highest price of squid coins, if you want to participate in a squid game in the coin circle, you need to pay a minimum of 15000 to 33450 US dollars, which does not include the cost of purchasing nft!
The official website of Squid Coin also promises that after their game is launched, the squid coin obtained by players will be officially connected with Bitcoin, Ethereum and other currencies. Players can then exchange squid coins for real-life currency.
As of last Friday, Squid coin had soared from 1 cent to $4.39.
02
The founders swept away at least $3.4 million! Thunderstorms have long been heard
On November 1, EST, squid coins suddenly crashed, falling from $2861 per coin to $0.0007 in 5 minutes, a decline of 99.999976%. According to the data of the blockchain tracking and analysis platform bscscan, about 40,000 people still held the virtual coin after the flash crash.
Weibo netizens commented that "it is in line with the spirit of the squid game" and "the method of cutting leeks is endless".
In the days leading up to the crash, investors complained that they could not sell their squid coins on pancakeswap, the only virtual currency platform that could trade the currency.
Subsequently, the squid coin founder explained that because the project deployed an innovative "anti-dumping technology" that restricts people from selling tokens when demand drops.
According to media reports, the founder of Squid Coin has said that the project is an official token partner of Netflix. It has also established a strategic partnership with virtual currency platform Coingecko.
However, in an interview with the media, co-founder Bobby Ong countered these claims: "Squid does not meet our listing criteria, so it will not be listed and traded on coincecko." This is most likely a scam. ”
For the project, some media said that there were many flaws earlier:
One is that there are grotesque spelling and grammar errors in the website. Meanwhile, the website with the domain name the squidgame.cash disappeared out of thin air at the same time as other social media accounts created by its creators. Another red flag is that Squid's official telegram channel, which was originally designed to receive feedback from users, suddenly banned comments from outside; its official Twitter account also closed the user's comment channel. Squid coin founders don't even have a profile on linkedin, etc.
This simple and crude operation has a special name in the coin circle called "rug pull", which refers to the sudden withdrawal of support from cryptocurrency developers, the abandonment of a project without warning, and the rapid sweeping away of investors' funds.
03
Investors are eager to get rich quick, and the media "fuels the waves"?
Why are investors so enthusiastic? The developers launched Squid Coin, using images from Squid Games, claiming that the cryptocurrency could be used to play the game of the same name as the web series, but was not licensed by the show's publisher, Netflix.
Just earlier this year, a similar incident happened to the previously popular mandalorian. It's pretty much the same, first concocting a cryptocurrency called mando, and then using character images from Disney+'s show Mandalorian, which of course didn't get Disney's permission.
An investor under the pseudonym "Bernard" reportedly said that when he heard about a token named after Netflix's hit web series Squid Game, he took a quick look at Google to see if the coin was legitimate.
After seeing the headlines about the token (many of which warned of some red flags about the project, but he didn't finish it), Bernard decided to invest his life's $28,000 savings in squid coins.
However, he's not the only one who thinks so, and "fear of stepping into the air" (fomo) is a common sentiment among cryptocurrency traders who rush to invest in early alternative coins and aspire to get rich quick.
Squid coin holders also said they were drawn to the news media that focused on squid coins, and this additional marketing made them feel that the project was real. But for those who bet their money on the squid coin, in the blink of an eye, their desire is gone.
From an economic point of view, squid coin took advantage of the global popularity of the "Squid Game" film and television drama and the hype of the virtual currency market, achieved "narrative" success, gained a far-reaching influence in the spread, compared with other fraudulent projects to attract more investors to enter, and finally led to harvesting.
Many netizens talked about this incident, describing it as similar to the plot of "Squid Game", "too real, only one person can survive", and some netizens described "this coin itself is a squid game". However, investors need to be cautious, whether they aspire to participate in the squid game or simply want to make a wave of money.
04
Musk's eponymous cryptocurrency soared 4,000% in January
Coincidentally, on October 30, the cryptocurrency "dogelon mars" (code elon), named after Tesla CEO Musk, reached a record high of $0.00000259, and the price at the beginning of October was $0.0000005, rising more than 4000% in a month, and the market value increased from $26 million to $1.4 billion, ranking among the top 100 cryptocurrencies in the world.
The so-called Meeme coin name contains three elements associated with Musk: Dogecoin, Elon, and Mars. Its founders say it's a project that will continue to evolve. Dogelon is an ERC20 cryptocurrency based on the Ethereum blockchain.
Musk's association with Dogecoin also has to start from the birth of Dogecoin, back to 2013, when the market value of Bitcoin rose rapidly, and the price of each coin rose from the previous worthless to dozens of dollars.
In the same year, Billy Markus, a former software engineer at IBM, used the code of another cryptocurrency, Litecoin, to create a "copycat" Dogecoin.
In order to rub the traffic of doge to the fullest, Marcus also bought the domain name of dogecoin.com to benchmark the official website of Bitcoin bitcoin.com; and in order to mock Bitcoin, he even changed the name of his Twitter to shibetoshi nakaoto, which was used to satirize Satoshi Nakamoto, the founder of Bitcoin.
Even compared with Bitcoin, Dogecoin is a sincere copycat. The "wow" next to the doge is ironic. Image source: getty images
Once everything was ready, Dogecoin was officially launched.
Originally, Marcus's vision of Dogecoin was intended to make it a "faster, more 'fun' alternative" to Bitcoin, so there was no total circulation set – which is completely different from the total amount of 21 million coins set at the time of Bitcoin's issuance.
But with the help of the social forum reddit, the netizens who were still in the doge were like discovering a new continent, and the traffic exploded exponentially - half a month later, Dogecoin became the seventh largest virtual currency in the world at that time.
Since Musk began "bringing goods" for Dogecoin in January this year and brought fire, some cryptocurrency investors have been worried.
Nic Carter, co-founder of Castle Island Ventures, called it a "speculative tool" and warned retail investors that "Dogecoin will lose money."
"People are buying cryptocurrency, not because they think it has any meaningful value, but because they hope that other people will come in, push up the price, and then they can sell it and make a quick buck." Investment analyst David Kimberley said in an exclusive interview with consumer news and business channels in the United States.
But Marcus, the founder of Dogecoin, hasn't benefited from its rapid growth. According to foreign media reports, Marcus sold all his Dogecoin when he was unemployed in 2015 and used the money he earned to buy a Honda Civic. Four years later, he deleted all his tweets and YouTube videos and disappeared from the internet.
05
Virtual currency speculation is risky
Virtual currency, as the name suggests, refers to non-real money. Since May this year, the domestic regulatory policy on virtual currency has continued to tighten, and the crackdown on virtual currency transactions has also been increasing.
On September 24, the Notice on Further Preventing and Handling the Risk of Speculation in Virtual Currency Transactions issued by ten ministries and commissions, including the Central Bank, the Banking and Insurance Regulatory Commission, the Cyberspace Administration of China, the State Administration of Foreign Exchange, the Supreme People's Court and the Supreme People's Procuratorate, clearly states that virtual currencies with the characteristics of non-monetary authorities issuing, using cryptography, distributed accounts or similar technologies, and existing in digital form, such as bitcoin and ether, do not have the same legal status as legal tender and cannot circulate in the market as currency.
According to industry analysts, there are many risks in speculating on virtual currencies, virtual currencies are susceptible to "Musk-style" speculation, and investors are "cut leeks" in a short period of time, thus suffering huge economic and property losses.
Dong Ximiao, chief researcher of CMF, stressed that the public should fully understand the nature and risks of virtual currencies such as Bitcoin, withstand temptations, protect wallets, and not participate in any form of transactions and speculation activities.