The launch of memecoin Pond0x has resulted in significant losses for investors, as reported on various social media platforms on July 28th. Maestro trading app data revealed that the Pond0x (PNDX) token saw its price soar to $0.36 before rapidly collapsing to near zero within just five minutes.
The announcement of Pond0x’s launch was made by Jeremy Cahen, the founder of Not Larva Labs, who is more commonly known by his Twitter username “Pauly.” Not Larva Labs developed a nonfungible token trading app for CryptoPunks and a separate parody collection called CryptoPhunks. It is important to note that Not Larva Labs is not associated with Larva Labs, the creators of CryptoPunks.
In the announcement, Cahen provided the contract address for PNDX and the URL for its official web app. The web app featured a Pepe meme graphic, similar to those used in successful memecoins such as Pepecoin (PEPE). The app allowed users to mint new PNDX tokens by exchanging a fixed amount of Ether (ETH), resembling a presale or fundraiser.
However, confusion arose among users as many expected the fundraiser to take place on Uniswap. The simultaneous listing of the website and contract address in Cahen’s post added to the confusion, according to reports on social media. As a result, some users bought the token on Uniswap using bot trading apps like Maestro or Unibot, driving up its price. Meanwhile, other users minted tokens through the web app and sold them on the market for a profit.
Unfortunately, numerous users suffered significant losses, with some reporting losses in the thousands or even millions of dollars. One disgruntled Pepecoin enthusiast expressed their frustration, stating, “WTH!!!! I just got wrecked!!! 4ETH [$7,484] worth like $0!!” Another collector revealed, “I put $50,000 in, and now it’s worth $10,” prompting another collector to reply, “That’s nothing, I just aped 2.5 million dollars, and it’s 169062929915 cents.”
According to a report from memecoin holder Rune, investors collectively lost over $2.2 million during the launch of Pond0x.
Furthermore, a user discovered that PNDX has a flawed transfer function, allowing users to transfer coins from any other user. The transfer function code includes a separate “brutalized_” function instead of a line of code that updates the user’s balance. At the time of publication, the impact of the brutalized_ function remains unclear.
Approximately two hours after the initial announcement, Rune issued an updated report, stating that the individual who initially drained money from investors is working on a new version of PNDX. This new project intends to provide a “dashboard” to compensate victims through a “community coin.”
Memecoins, which are coins associated with viral internet images or videos, rose to prominence with the launch of Dogecoin (DOGE) in 2013 and continue to be popular today.
In recent news, several memecoins linked to the U.S. Securities and Exchange Commission saw a surge in price following the agency’s lawsuits against crypto exchanges Coinbase and Binance. Additionally, during a U.S. House of Representatives hearing on unidentified flying objects, various alien-themed memecoins were created and promoted on social media.
(Note: This article was updated on July 29th to disclose that “Pauly” refers to Jeremy Cahen.)
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