The launch of the memecoin Pond0x has resulted in significant financial losses for investors, with reports on social media indicating that millions of dollars were at stake on July 28.
According to data from the Maestro trading app, the Pond0x (PNDX) token experienced a price surge, reaching $0.36, only to swiftly plummet to nearly zero within just five minutes.
Jeremy Cahen, better known as “Pauly” on Twitter and the founder of Not Larva Labs, announced the Pond0x launch on July 28.
Not Larva Labs is the developer of a nonfungible token trading app for CryptoPunks and a separate parody collection called CryptoPhunks, unaffiliated 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 the successful memecoin Pepecoin (PEPE), which gained popularity with a ticker price of $0.000001.
The app allowed users to mint new PNDX tokens by exchanging them for a fixed amount of Ether (ETH), akin to a presale or fundraiser.
However, confusion arose as some users expected the fundraiser to occur on Uniswap, and the inclusion of both the website and contract address in the same post added to the ambiguity, as per social media reports.
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Several users purchased PNDX tokens on Uniswap using bot trading apps, such as Maestro or Unibot, causing its price to rise. Meanwhile, others minted tokens through the web app and sold them at a profit.
Numerous investors reported losing thousands or even millions of dollars. Complaints flooded Cahen’s initial post, with users expressing their significant losses.
One disillusioned Pepecoin enthusiast lamented losing 4 ETH (worth $7,484) for nearly worthless tokens.
Another user claimed their $50,000 investment was now valued at a mere $10, and yet another revealed losing a staggering $2.5 million.
A report by memecoin holder Rune estimated that investors collectively lost over $2.2 million during the Pond0x launch.
In addition to financial woes, a user discovered a flawed transfer function in PNDX, enabling users to transfer coins from any other account.
The transfer function exhibited an unusual behavior, calling a separate “brutalized_” function instead of updating the user’s balance.
The impact of this “brutalized_” function was not determined by Cointelegraph at the time of publication.
Rune later provided an updated report, indicating that the person responsible for draining funds from investors was now creating a new version of PNDX.
This new project aimed to offer a “dashboard” to compensate victims through a “community coin.”
Memecoins, tied to viral internet images or videos, gained prominence with the launch of Dogecoin in 2013 and remain popular today.
Notably, memecoins experienced price surges in connection with events such as the U.S. Securities and Exchange Commission suing crypto exchanges Coinbase and Binance, as well as during a U.S. House of Representatives hearing on unidentified flying objects when several alien-themed memecoins emerged and gained attention on social media.
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