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The introduction of the memecoin Pond0x has resulted in significant financial losses for investors, as reported by various social media sources on July 28. Data from the Maestro trading application indicates that the Pond0x (PNDX) token peaked at a price of $0.36 before plummeting to nearly zero within just five minutes.
Maestro chart of PNDX/USD during its launch. Source: Maestro
The launch of Pond0x was revealed on July 28 by Jeremy Cahen, the founder of Not Larva Labs, who is more widely recognized by his Twitter handle “Pauly.” Not Larva Labs is the creator of a non-fungible token trading application for CryptoPunks, as well as a separate parody collection known as CryptoPhunks. It is not affiliated with Larva Labs, the original creators of CryptoPunks.
In the announcement, Cahen provided the contract address for PNDX along with the link to its official web application.
Welcome To Pond0x https://t.co/iSiwpRDrix • $PNDX
Contract: 0x1d4214081985ad20aa3ca93a2206ae792635cbec
️ pic.twitter.com/UokLAHPaSn— PAULY (@Pauly0x) July 28, 2023
The web application featured a Pepe meme graphic, akin to those seen in successful memecoins like Pepecoin (PEPE). The platform enabled users to mint new PNDX tokens in exchange for a set amount of Ether (ETH), resembling a presale or fundraising event. However, many users anticipated that the fundraiser would occur on Uniswap, and the simultaneous listing of both the website and the contract address in the same announcement led to confusion, based on social media feedback.
Related: Meme coin price predictions 2023 compared: Pepe Coin, Thug Life, and more
Some individuals acquired the token on Uniswap using bot trading applications like Maestro or Unibot, which drove its price higher. In contrast, others minted tokens via the web application and subsequently sold them on the market for profit.
Users reporting losses indicated that they had suffered thousands or even millions of dollars in losses. In response to Cahen’s initial tweet, one Pepecoin supporter lamented, “WTH !!!! I just got wrecked !!! 4eth [$7,484] worth like $0 !!” Another collector remarked, “I invested $50,000 and now it’s worth $10 dollars,” prompting yet another collector to respond, “That’s nothing, I just aped 2.5 million dollars and it’s [now] 15 cents.”
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A report from memecoin holder Rune stated that investors lost over $2.2 million during the launch.
Pauly time rugged for a week, and fucked up so hard that near everyone lost money in $PNDX
He pasted a contract and a website. On the website people could mint tokens, but it was like a presale. Some random dude added liquidity right after minting, and everyone started buying… pic.twitter.com/iETfmRpVXn— Rune (@RuneCrypto_) July 28, 2023
Another participant noted that PNDX has a defective transfer function that enables users to transfer coins from any other user. Blockchain data indicates that the transfer function for the token is atypical. Instead of including a line of code that updates the user’s balance, it invokes a separate “brutalized_” function.
The code of the transfer function in the PNDX token contract. Source: Etherscan
Cointelegraph was unable to assess the impact of the brutalized_ function by the time of publication.
Approximately two hours after the initial announcement, Rune provided an update stating that a new iteration of PNDX is being developed by the individual who originally depleted the funds from investors. According to Rune, the new initiative will feature a “dashboard” aimed at compensating victims through a “community coin.”
Memecoins, or coins linked to a viral internet image or video, gained prominence with the launch of Dogecoin (DOGE) in 2013. They continue to enjoy popularity today.
On June 7, several memecoins themed around the U.S. Securities and Exchange Commission experienced price surges following the agency’s lawsuits against crypto exchanges Coinbase and Binance. On July 27, numerous alien-themed memecoins were created and marketed on social media during a U.S. House of Representatives hearing regarding unidentified flying objects.
Update (July 29, 04:32 am UTC): This article has been revised to reveal the identity of “Pauly” as Jeremy Cahen.
