Altseason is officially upon us. All it took was a DOGE shaped spark to start the next round of memecoins and shitcoins overtaking the market. While some are legitimate projects others have a more nefarious plan in play. Today we'll be taking a deep dive into one of the most recent Rug Pulls, Shikokuaido (SHOKK), and what we can learn from it so we can steer clear of the next one.
The Hype
Telegram channels, YouTube videos and a mildly impactful Twitter campaign all helped SHOKK build the hype around their coin yesterday, claiming it was the next project from SHIB's team. Their Telegram groups disallowed inbound messages pre-launch, all echoe'd the same unverifiable claim about SHIB and warned they would ban any FUD (Fear, Uncertainty, Doubt) upon launch. All red flags for sure but to get in early on the next SHIB like project would mean incredible profits. All these red flags though seemed to dissipate, as once launched the LP Token Burn was posted to the Telegram chat as well as ownership being renounced.
The race was on, SHOKK's price action was bouncy but their trading volume was quite high. People in the Telegram chat were talking about getting in 30 minutes ago and already being up $500-$1000, things were looking quite juicy.
The Oldest Trick in the Book
All the pandemonium and the token burn disguised one of the oldest tricks in the book. The original address that created SHOKK, 0xdfd09bc459f6adb06de6ddc1fd4d38862a4ef5e2, had supposedly sent 35% to Vitalik Buterin, 5% to charity wallets, 5% to marketing wallets and 50% to Uniswap for liquidity but a quick check on Etherscan tells a different story. While 35% was sent to Vitalik Buterin, only 37% was locked on Uniswap and 28% was sent to private wallets. Which means after what was essentially a 35% Vitalik Burn, 43% is being held on private wallets and 57% was entered into circulation.
So the up and down price action can be explained by the fact that 43% of the token supply will be entering the market from these private wallet address. If you check any one of the addresses SHOKK was sent to pre-launch you can see periodic swaps happening for SHOKK->ETH, then an exchange to DAI and a cash out to another wallet. So not the most clever rug pull but clearly an effective one as their Telegram is still fully buying into SHOKK mooning (which could be in part to them banning anyone that dissents).
On top of the misleading supply amounts and slow drip rug pull by the developers, Reddit user lleti, found that "...this is no standard SafeMoon fork. This is a fork from one of their Charity Coins - so, while ownership was renounced, this one has a "charity wallet" which reflects a heavy percentage of tokens in to. This wallet address, and the fee that's paid into it can be changed at any time via the Contract page." Which is especially frightening as the Charity wallet address can be changed to that of a dev's or one of their friends to collect even more profit from.
Similar to how USDC can blacklist an address from sending/receiving tokens SHOKK has a built-in AddBotToBlacklist(address) that would block the entered address from selling their tokens. Although it says "AddBot" the contract would not be able to distinguish what is a bot, it would only add the specified address to the blacklist and prevent it from selling.
Conclusions
Altseason offers opportunities for both huge profits and massive loss. Learning how to identify which projects are real and which projects are fake is vital to you making the most out of the time we're in. While it can look amazing to get in on a project like SHOKK early, it can be even more harmful to jump into a project without doing your due diligence first. A quick search on SHOKK's website would show they list none of their team and show no history of being involved in previous projects and a review of their contract (or in my case a review from a trusted person) shows some less than desirable functions in it.
The number one thing I gained from researching this was to do your due diligence and never think that taking the 30 minutes to 1 hour to review all the material at hand will result in you losing out on a big gain. There will be more projects in the future and more opportunities to make money. So please invest responsibly and never throw in more than you'd be willing to lose.
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