The launch of the memecoin Pond0x (PNDX) has resulted in significant losses for investors, with reports emerging on social media about millions of dollars being lost. The price of the PNDX token skyrocketed to $0.36 before crashing to near zero within a span of just five minutes, according to data from the Maestro trading app.
The announcement of Pond0x’s launch was made by Jeremy Cahen, also known as “Pauly” on Twitter, who is the founder of Not Larva Labs. Not Larva Labs is the developer of a nonfungible token (NFT) trading app for CryptoPunks and a parody collection called CryptoPhunks. It’s important to note that Not Larva Labs is not associated with Larva Labs, the creators of CryptoPunks.
In the announcement, Cahen shared the contract address for PNDX and the URL for its official web app. The web app featured a Pepe meme graphic, similar to successful memecoins like Pepecoin (PEPE). Users could mint new PNDX tokens by exchanging a fixed amount of Ether (ETH), similar to a presale or fundraiser. However, confusion arose as many users expected the fundraiser to take place on Uniswap, and the listing of both the website and contract address in the same post added to the confusion.
Some users purchased PNDX tokens on Uniswap using bot trading apps like Maestro or Unibot, driving up the token’s price. Meanwhile, other users minted tokens using the web app and sold them on the market for a profit.
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Unfortunately, many investors reported losing significant amounts of crypto. One Pepecoin enthusiast expressed frustration, stating, “WTH! I just got wrecked! 4 ETH ($7,484) worth like $0!” Another investor mentioned losing $50,000, now reduced to only $10, while another claimed losses of $2.5 million. According to memecoin holder Rune, the total losses incurred during the launch exceeded $2.2 million.
Further reports indicated that PNDX has a faulty transfer function that allows users to transfer coins from any other user. Unlike typical transfer functions that update the user’s balance, the PNDX transfer function calls a separate function labeled “brutalized_.” The effects of this function were not yet determined at the time of publication.
Approximately two hours after the initial post, Rune provided an update stating that the person responsible for draining the money from investors is creating a new version of PNDX. This new project aims to compensate victims through a “community coin” and will include a “dashboard” to facilitate the process.
Memecoins, which are coins associated with viral internet images or videos, first gained popularity with the launch of Dogecoin (DOGE) in 2013 and continue to be popular today. The launch of several U.S. Securities and Exchange Commission-themed memecoins after the agency’s lawsuits against Coinbase and Binance, as well as the creation and promotion of alien-themed memecoins during a U.S. House of Representatives hearing on unidentified flying objects, demonstrate the ongoing appeal of memecoins.
In conclusion, the launch of Pond0x has resulted in significant losses for investors, with the PNDX token’s price crashing from $0.36 to near zero within minutes. Confusion surrounding the fundraising process and the discovery of a faulty transfer function have further exacerbated the situation. However, efforts are being made to compensate affected users through the creation of a new version of PNDX and the implementation of a “community coin” and dashboard. The incident serves as a reminder of the volatility and risks associated with investing in memecoins.
