The latest two DeFi protocols to pump and dump worthless tokens have been Hotdog and Pizza as the food meme trend continues. They are essentially clones of other defi platforms, some of which are clones themselves.
The latest is a Uniswap clone called Hotdog that, just like SushiSwap, promised better APYs and shares in governance tokens. Yield farmers, dubbed degens from the word degenerate, flocked to the platform in hopes of similar gains that SushiSwap made.
DeFi Pump and Dump
HOTDOG tokens skyrocketed to as high as $6,000 in just a few hours, according to charts on Uniswap.info. It appears that the early adopters then sold off after the dump, which induced an epic dump smashing the token back to a dollar in just an hour.
In the course of 5 minutes, the HOTDOG tokens took a deep dive from $4000 to $1.
At the time of writing, HOTDOG tokens were trading at $0.017, which is as close to zero as you can get following a dump of 99.99%.
The scam is made possible by the nature of Uniswap’s decentralized exchange that allows anyone to create and list any token. Once a little liquidity is provided to it with some ETH, the owners can artificially inflate the token price by controlling the ETH.
Once enough gullible farmers have flocked to the platform and deposited liquidity, the tokens are dumped, resulting in what has just happened with these Hotdogs. The pump and dump was observed by the crypto community.
This $hotdog thing everyone is on about shows that you shouldn’t be tossing money at projects without researching just because uniswap coins are the trend. I’m happy trading the old way on #binance .
My thoughts go out to anyone who took a hit on this❤ pic.twitter.com/C24B7OsHd1
— Simon Hayes (@Hayess5178) September 2, 2020
Anyone For Pizza?
Another cloned DeFi platform called Pizza Finance also offered six-figure returns for its liquidity providers. The same thing happened with this dodgy token, but only faster. In just two hours, PIZZA surged to $370 before getting dumped back to zero, according to Uniswap.info.
At the time of writing, the token was trading at around $0.069 as another DeFi doppelganger bites the dust.
It appears that Kimchi is still in operation, although its tokens have dumped 70% on the day down to just over $2. Sushi has got a bit of a boost from a recent Quantstamp security review following questions about its code and time locks on the admin wallet.
SUSHI tokens surged to $8.70 today, but it should be noted that the smart contracts have yet to be fully audited. At the time of writing, they are already beating a retreat again as the DeFi food cools down for the degen farmers.