In a speculative frenzy characteristic of bull markets, a crypto user recently expended a staggering $113,000 in gas fees to seize a newly launched token. The attempt, however, ended in disappointment as the token, known as NO, experienced a swift rise and fall within just 35 minutes after its debut.
A costly gambit
The ambitious user initiated a transaction on February 13th, transferring 10 Ether (ETH), valued at around $26,000, to a smart contract address. This smart contract promptly converted the ETH into Wrapped Ether (WETH) and exchanged it for 30 units of the freshly listed ERC-404 token, NO.
Despite the relatively modest investment, the gas fees associated with this transaction amounted to a whopping 42.8 ETH, equating to an eye-watering $113,211.
The initial excitement surrounding NO saw its price surge from $6.80 to an astronomical peak of approximately $70,000 per token. However, this euphoria was short-lived, as the token’s value rapidly plummeted to near zero within 35 minutes.
This sudden reversal left the user and other investors reeling from what has been described as a “rugged” incident.
High-risk ventures
Before the unfortunate NO investment, the wallet address associated with this user had been actively capitalizing on the ERC-404 trend, amassing over $1.1 million in profits from Pandora tokens.
Notably, the ERC-404 standard, an experimental token framework, aims to merge the characteristics of ERC-721 non-fungible tokens (NFTs) with ERC-20 tokens, enabling fractionalized ownership of NFTs.
Despite the allure of potential profits, the NO token’s safety score of 0 out of 100, as assessed by blockchain analytics service Crypto Monkey, highlights the inherent risks associated with such ventures.
The token’s contract had not been renounced, and a mere two addresses held 90% of its supply, raising concerns about centralization and susceptibility to manipulation.
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