Cryptheory

24/7 crypto news, cryptocurrency meaning, guides, learning, #cryptohelpschildren

A 'War on Rugs' Has Been Declared Against ETH Creator Over SHIB Transfer

3 min read

The Telegram group War on Rugs hates rug pulls. So, naturally, it’s…trying to pull the rug out on ETH.

The watchdog group, which says it’s composed of developers and auditors, has created the Rug ETH (RETH) token in retaliation for ETH co-founder Vitalik Buterin’s decision to transfer millions in Shiba Inu (SHIB) to charity while simultaneously crashing the market for the token.

“Vitalik rug pulled Shiba, innocent investors have been hurt,” War on Rugs told Decrypt via direct message the day before launching the token. “He should never be shown as a hero for this.”

Binance CEO Changpeng Zhao, who agreed to list the token on Binance’s “Innovation Zone,” has called SHIB “super high risk.” And War on Rugs, which looked at the smart contract, noted earlier this year that Buterin had a very large stake in the token, which meant it could be vulnerable.

A rug pull is a type of scam in which developers abruptly leave a project and take investors’ money with them. They’re common in the Wild West of decentralized finance (DeFi), where people can go to get crypto loans, earn interest, and trade assets without the help of a financial intermediary—or the insurance such intermediaries provide. 

Buterin, however, didn’t develop the token—he received it. The creators of the meme token sent trillions of the sub-penny asset to Buterin, who is revered among ETH acolytes for his intellectual prowess and his seeming lack of concern for the things money can buy. No Lambos here. Sending the funds to Buterin’s wallet lent the project the veneer of legitimacy while also theoretically decreasing the supply because Buterin wouldn’t touch the funds. 

Theoretically. On Wednesday, Buterin did just that, removing the tokens from a liquidity pool in Uniswap and contributing to a crash in token price. As recently as Tuesday, the price of SHIB was $0.00003394. By Thursday, it had fallen by more than half, to $0.00001563.

Dogecoin Spinoff SHIB Tanks After ETH Founder Vitalik Buterin Dumps Tokens

Buterin, meanwhile, was feted in some camps as a hero for shucking off a project he didn’t want to be associated with and giving the loot to charity. SHIB is run on the ETH blockchain, where its burgeoning popularity contributed to high transaction fees and network congestion, already a problem for the network. Buterin has yet to speak publicly about his motivations.

To War on Rugs, Buterin is the villain. 

The RETH token, available on PancakeSwap, is its ironic revenge. Each transaction using the token incurs a 4% charge, half of which goes to holders and the other half of which goes toward borrowing ETH. 

That ETH is then dumped on DeFi crypto lending marketplace Venus Protocol in favor of Binance Coin. (Venus, unlike many other DeFi lending platforms, is built atop Binance Smart Chain, not ETH.) This, says War on Rugs in a Medium post, will ultimately “create constant sell pressure on ETH pairs on BSC,” meaning the price of ETH will become depressed. (In a twist, it also sent Vitalik 50% of the 100 quadrillion supply, though it has banned his wallet from using it.)

RETH has more than 2,100 holders since going live this morning, according to blockchain tracker BscScan. 

The move adds additional intrigue to a brewing cold war between ETH and Binance Smart Chain, a rival network for DeFi applications established by cryptocurrency exchange Binance. Some have argued that Binance benefits from congestion on ETH, providing it motivation for listing bulky speculative tokens such as SHIB on its own exchange.

And, now, it will literally be getting the benefits of RETH sales, whether it has the appetite for this rug pull or not.

Source

Leave a Reply

Your email address will not be published.