Rug PullA crypto rug pull scammer has come on the receiving end of his own creation. According to a report by Arkham Intelligence, this week, a developer tried to rug pull a token that he had created only an hour before. However, the rug pull did not go according to plan. So what happened? In an instant, the money was gone, and most of it was his own.
What is a rug pull?
A crypto rug pull refers to a deceptive practice in the world of crypto where the creators or developers of a particular project abruptly abandon it or manipulate it with the intention of stealing the invested funds from unsuspecting participants.
It typically involves a situation where a token or coin, often with promises of high returns or innovative features, suddenly loses its value or becomes completely worthless, leaving investors with significant financial losses.
In a rug pull scenario, the individuals behind the project may intentionally create hype or excitement around it, enticing investors to buy the token or contribute funds to the project. They may employ various tactics to build trust and credibility, such as active community engagement, partnerships, and marketing campaigns.
However, once a substantial amount of money has been invested, the creators execute their plan to abruptly abandon the project, liquidate their own holdings, and disappear, leaving investors with worthless tokens and no means of recourse.
Here’s how the rug pull was masterminded
The rug pull plan fell under $FILTH, and from the outside, it looks like an ordinary rug pull. However, all the signs were there. First, there were constant buys from a group of suspiciously similar-looking wallets. Secondly, there is a complete lack of regular sell transactions. In the end, one final sell transaction of approximately 1 million times the “total supply”
However, on a closer look, there is much more below the surface. The rug pull transaction itself had so many questionable loopholes. The address 0x66e calls a contract function to mint 1 million times more than FILTH’s “Max Supply” – and sells it all into the pool. After that, the contract then pays the block builder.
However, one tends to wonder why a rugger would want to pay the block builder. Note that internal payments to a block builder denote a bribed transaction – the user wants that specific transaction included before any others. In the crypto ecosystem, most frequently, builders receive bribes from MEV Bots.
The rugger added code to the $FILTH token contract, granting his account privileged access to modify the coin holdings of any account. This means that only the rugger has the ability to execute the infinite-mint function and deplete the coin’s liquidity. The rugger’s account accomplished precisely that.
The ruggers address 0xB1D (the account with creator privileges) invoked the below function, minting 111,111,111,111 FILTH tokens to his address. Nonetheless, a MEV Bot detected that it could perform the same task quicker.
This MEV Bot copied his transaction and added additional code to dump the coins for ETH in the same block. The tokens went to the MEV Bot’s address and were instantly sold for the entire balance of ETH in the pool. In the long run, the rugger got nothing except FILTH tokens.
A MEV bot, also known as a Miner Extractable Value bot, is a type of automated software or algorithm that operates within blockchain networks, particularly in decentralized finance (DeFi) environments. MEV refers to the potential value that miners or validators can extract from the order and execution of transactions within a blockchain.
MEV bots aim to exploit opportunities for profit by strategically sequencing and including transactions in blocks to maximize their own financial gain. These bots monitor pending transactions, identify favorable conditions, and strategically submit their own transactions or modify existing ones to benefit from price discrepancies, front-running opportunities, or other exploitable situations.
ETH tokens tangled up in the rug pull
The rugger had previously possessed the majority of the ETH taken from the pool during the precisely executed rug pull. Rug-pullers, as mentioned in the piece, washtrade their coins in several wallets because they get their money back when they pull the rug. The rug puller must have been new to this or forgot to run the full process to scam.
In fact, the overwhelming majority of the pool’s funds originated from 160 addresses that each contributed 80 ETH in a single transaction. This singular distribution from 0x8a1, labeled ‘Rugger Funding Source’, funded all of the addresses marked as ‘Wash Trading Addresses’ below.
Each address received 0.5 ETH, and immediately began interacting with the FILTH LP by making buys and sales to increase the volume of the pool. Before the rug pull, these addresses were responsible for 95.5% of the total FILTH trade volume.
The ‘Wash Trading Addresses’ group sent $152.47K in ETH to the Uniswap pool and received different amounts of FILTH in exchange. However, their total sales were reduced by only $67.45K in ETH. The $85K differential amount went directly to the MEV Bot.
The remaining $5,000 of the total $90,000 was contributed by users who lost money on this coin. However, they may feel marginally better knowing that the developer who ruggedized them is also rugged. On-chain karma?
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