Avalanche’s First Meme Coin Ended In A $30 Million Rugpull

Avalanche’s first meme coin ended in a $30 million rug pull and SDOG or SnowDogDAO, lost over 90% of its value as we can see more in our latest altcoin news today.

Despite millions of dollars in investments being lost, the SnowDogDAO team maintained that the event was not really a rug pull but it only was a game-theory experiment that went wrong. Avalanche’s first meme coin was a decentralized reserve meme coin and failed yesterday after being live only 8 days. It was launched as an experiment scheduled to end with a huge buyback program as it attracted a lot of attention in the crypto community. The development team said that it created a game theory experiment to create awareness for Snowbank:

“We believed that the combination of a decentralized reserve meme coin that would die after 8 days, with the perspective of a giant buyback would create interest and bring exposure to the Snowbank project.”

@SnowdogDAO $SDOG rugpulled. Here's how:
1. Promised a 40M buyback happening on its own DEX Snowswap and migrated all liquidity from Joe
2. Snowswap contract requires a "challengeKey" to trade which only insiders knew it beforehand
3. Insiders backran the buyback and made 10M pic.twitter.com/tfKDqA4t4I

— TechnoArtoria (🦇,🔊) (@artoriamaster) November 25, 2021

The pinnacle of the experiment was set to be a huge buyback which was supposed to be financed by assets acquired by the Snowdog treasury via mint sales. In the past 8 days, the treasury market value increased to $44 million which meant that the holders were able to compete for a portion of the funds in the buyback program. What the developers didn’t tell you was that it failed to make it clear that only 7% of SDOG supply was eligible to be sold above the market prices before the buyback. To avoid the front running, Snowdog created its own AMM  based on Uniswap V2 and migrated all of the SDOG liquidity from a popular Avalanche DEX.

However, the buyback failed in a few moments of launching with hundreds of users losing their funds. A single address managed to make almost $10 million by swapping SDOG for other coins and removed a quarter of the treasury’s buyback power. Before the buyback, the address bought another $180,000 worth of DOGE with MIM in batches of $10,000 and then staked the token but a day later it staked the funds and was able to drain over $10 million worth of MIM. Two other wallets managed to drain .
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7 and $3.3 million with the same strategy.

So $SDOG @SnowdogDAO just rugged $10.392+ Million in $MIM. https://t.co/jhmkeYMTHx pic.twitter.com/I5owBGO9Jw

— James (@JamesCliffyz) November 26, 2021

While the owners are yet to be identified, most think that the funds belonged to people related to the development team. After suffering a huge blowback from the community, the development team clarified that the event was not a rug pull but didn’t convince the public that the action wasn’t pre-planned.