In a crazy bull market... and even more so in the hyper-macho crypto space, there are quite a number of people who have a high appetite for risk. Which is all fine and good (I'm not really one of those...), and there are equally almost as many of these "alpha" type (as they like to self-describe themselves) who are incredibly eager to full credit for their successes and profit... but would like to go running home to Mummy if something goes wrong.

Today was a case in point... this morning, I had woken up to see that a token smart contract flaw was discovered by the Illuvium team in the staked/escrowed Illuvium token (sILV) that is issued as rewards for staking Illuvium (ILV) and used as in-game currency for the Illuvium game when it launches. sILV was designed to be a 1:1 peg with ILV, and so with ILV trading at roughly 1000 USD give or take... it should have been worth roughly a similar amount.

ILV can be staked at the moment on the Ethereum mainnet (yes yes, the pain...)... and the staking rewards can either be claimed as ILV with a 12 month vesting period, or as freely trading sILV which is a token peg that is supposed to be 1:1 in-game peg for ILV proper. Interestingly enough, I checked today... and I appear to have only been claiming ILV with the 12 month vesting and not bothering with the freely floating sILV... which turns out to be a nice thing given today's news! Of course, given that there was a freely tradable token (sILV), there was going to be a Uniswap pool for it... and so, the was a sILV/ETH pool, with the sILV trading at around 500 USD or roughly half of the "real" ILV token price.

So, where things get interesting... the Illuvium team had discovered a flaw in the sILV token contract which was allowing someone to drip mint sILV tokens over the last month or so and sell them slowly on the sILV/ETH Uniswap pool. Pretty interesting, as the min and sell was slow enough to not really attract much attention until this morning's announcement.

The plan from the Illuvium team was to snapshot the sILV holders and then mint lots of sILV themselves and rug the ETH pool. They would then use the rugged ETH proceeds to compensate the sILV snapshot holders with a new sILV token that would have the vulnerability fixed. Seems like one way to fix the problem... a bit abrupt perhaps, but perhaps the only one that seemed to work at the time?

Anyway, I'm not really here to talk about that... needless to say... when the Uniswap token was rugged, it led to the pull dropping from about 500 USD to about 0 in about 30 minutes or so. Which some people (alpha bros...) took to be a signal to "buy the dip"!

Let me tell you, buying the dip doesn't mean that you buy tokens that you have seen drop 99% in a matter of minutes. We all know what that means... it isn't a dip, it is a rug or a cliff... and if you are dumping money into that black hole hoping to beat the other "buy the dippers" and dump on them later... well, you are either knowingly being a prick... or you really need to slow down before throwing money at things! Nothing drops 99% without a reason.... and let me tell you, the reason isn't that it is going to moon!

Still... that said, crypto is full of immature investors... and people do come weirdly flocking to dying or dead coins!

The most interesting part of this story is that the Illuvium Discord started filling up with people who claimed that they were duped... when they bought the sILV token at a 99% discount, they thought that they were getting a great deal... and now that they knew that the token had been rugged and was being redistributed they had come crying that they wanted a share of their compensation (after discovering that they weren't going to be able to dump on anyone... and that their smarts had made them the bag holders). Obviously, the snapshot of sILV token holders was done BEFORE the team rug... and so, anyone buying after the "dip" was out of luck.

Honestly... people need to slow down or take responsibility. Either take responsibility that their greed had made them dump money into a token that was obviously doing something weird... or slow down and question why the price was 99% cheaper than expected. Either way, it is clear that not everyone is ready for the personal responsibility that crypto and decentralised finance brings us... it is all fun and games when you are winning, but the responsibility is still there when things get bad. That is what we have signed up for...

I can also be found cross-posting at:
Hive
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Publish0x

Handy Crypto Tools

Ledger Nano S/X: Keep your crypto safe and offline with the leading hardware wallet provider. Not your keys, not your crypto!
Binance: My first choice of centralised exchange, featuring a wide variety of crypto and savings products.
Kucoin: My second choice in exchanges, many tokens listed here that you can't get on Binance!
FTX: Regulated US-based exchange with some pretty interesting and useful discounts on trading and withdrawal fees for FTT holders. Decent fiat on-ramp as well!
MXC: Listings of lots of interesting tokens that are usually only available on DEXs. Avoid high gas prices!
Huobi: One of the largest exchanges in the world, some very interesting listings and early access sales through Primelist.
Gate.io: If you are after some of the weirdest and strangest tokens, this is one of the easiest off-chain places to get them!
Coinbase: If you need a regulated and safe environment to trade, this is the first exchange for most newcomers!
Crypto.com: Mixed feelings, but they have the BEST looking VISA debit card in existence! Seriously, it is beautiful!
CoinList: Access to early investor and crowdsale of vetted and reserached projects.
Cointracking: Automated or manual tracking of crypto for accounting and taxation reports.
Stoic: A USD maximisation bot trading on Binance using long-term long strategies, powered by the AI/human system of Cindicator.
StakeDAO: Decentralised pooled staking of PoS assets.
Poloniex: One of the older regulated exchanges that has come into new ownership. I used to use it quite a lot, but have since stopped.
Bitfinex: Ahhh... another oldie, but a goodie exchange. Most noted for the close affiliation with USDT and the Basic "no-KYC" tier!