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The Pond0X decentralized exchange (DEX) has surpassed $100 million in total trading volume, according to a September 28 social media post from its official channel. Investors previously lost over $2 million during the launch of the exchange’s native token, PNDX, when it was revealed that the coin possessed a transfer function allowing anyone to move tokens without the owner’s permission. However, supporters argue that these losses were not the fault of the developers.
$108,000,000 Trade Volume ✅
And counting.
What comes next…?
pic.twitter.com/lpetFqJAkq— Pond Coin (@Pond0x) September 28, 2023
Citing a Dune dashboard created by user mogie, the official channel presented evidence of Pond0X DEX’s trading volume, which showed over $111 million in all-time trading volume as of September 29.
Total volume metric for Pond0X. Source: @mogie Dune channel
The PNDX token launched on July 28. At the time, critics accused the project of being a “rug pull” or exit scam. The controversy centered on the unorthodox launch method employed by the project’s founder, Jeremy Cahen (also known as “Pauly”). In his launch post on X (formerly Twitter), Cahen shared a URL to an application that allowed users to deposit a fixed amount of Ether (ETH) to receive a fixed amount of PNDX. He also posted the contract address for the token.
In response, some investors began buying the coin on Uniswap using its contract address, while others deposited ETH into the app to receive PNDX. The price on Uniswap quickly rose above the cost of the ETH required to mint PNDX, prompting minters to sell their coins on the market for a profit. Critics argued that this mechanism transferred over $2 million in wealth from those who bought the coin on Uniswap to those who minted it via the app. The ETH deposited through the app was locked in a contract with no mechanism for reclaiming the funds, leading critics to allege that the project was designed to drain investor funds and send them to Cahen.
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Additionally, coding experts claimed that the token lacked a standard transfer function. Instead of restricting transfers to the token owner, PNDX allowed anyone to transfer the tokens. This meant that each PNDX owner could lose their tokens at any moment, as any programmer could “steal” their PNDX using developer tools. On July 29, Solidity enthusiast and blogger sm-stack claimed to have conducted a test in Foundry that proved this vulnerability.
However, more than two months after the project’s launch, it continues to attract hundreds of supporters on Twitter. Replies to official posts frequently feature comments such as “FEELS GOOD MAN” and “Best DEX, don’t see a reason for people to use other tbh.”
Best DEX, don’t see a reason for people to use other tbh
— Lemur (@OGLemur) September 28, 2023
On July 29, crypto trader and blogger Antony Williams claimed to have analyzed the app’s smart contract code and explained its mechanics. According to him, Pond0x is “fundamentally an LP Farm” rather than a complete scam. The application issues each user an ID that determines their share of a pool of Pepe (PEPE) tokens. Users can increase their entitled PEPE rewards by calling the “BribeforLevelUp” function. To invoke this function, the user must deposit 0.26 ETH. This ETH is used to purchase PEPE tokens, which are then deposited into the pool to pay out rewards. The exchange also assigns a “Score” to each user. Higher scores represent greater potential rewards from trading fees collected, assuming all other factors remain constant.
Related: BALD token developer denies rug pull as price falls 85% post-launch
Williams did not state that these rewards could be claimed immediately but asserted that the developer “likely” intends to pay them out at some point in the future. He also claimed that the PNDX token “is essentially valueless,” suggesting this structure may have been created “to avoid legal complications.”
The project launched its decentralized exchange on September 1. According to the Dune dashboard cited above, this DEX has now reached over $100 million in trading volume, indicating that at least some traders remain undeterred by the criticism surrounding Pond0X.
