Unlucky Trader Loses $10,000 on Pudgy Penguins’ PENGU Token Airdrop

A cryptocurrency trader experienced a significant financial loss when they attempted to front-run the Pudgy Penguins airdrop on December 17. The trader’s initial $10,000 investment in the PENGU token turned into less than $3 within minutes, according to on-chain data and community reports.

The trader’s mistake was buying the PENGU token at a market capitalization of $14 trillion, a vastly inflated valuation. This error was likely due to the trader purchasing the token from a manipulated liquidity pool on the Jupiter decentralized exchange.

What Went Wrong?

The trader, often referred to as a “sniper,” uses advanced trading tools to quickly acquire newly launched tokens. However, a glitch in Jupiter’s decentralized exchange directed the trader to a low-liquidity pool. This pool was likely manipulated by tech-savvy bad actors who exploited the bonding curve system used by DEX aggregators like Jupiter.

The bonding curve system autonomously adjusts price tags based on demand. However, this system can be manipulated by creating highly volatile liquidity pools. In this case, the trader failed to verify the contract address or token market capitalization before making the purchase.

Pudgy Penguins Roadmap and Token Details

The Pudgy Penguins’ roadmap includes activating PENGU features on Ethereum’s blockchain and launching the layer-2 Abstract Chain network. The PENGU token has a total supply of 88.88 billion tokens, with seven million eligible addresses for the airdrop.

The airdrop was part of Pudgy Penguins’ recent recovery in the non-fungible token (NFT) market. The NFT collection, owned by Iglo Inc., is one of the top three NFT projects by market capitalization. A single Pudgy NFT previously traded for more than a Bitcoin.

After the airdrop, the Pudgy Penguins NFTs traded for $60,000 on average, with a 50% correction adjusting the floor price to 15.63 Ether.

“Somebody bought $PENGU @$14T mc turning his $10k to $5 in seconds lmfao”

Tips for Avoiding Similar Losses

  • Always verify the contract address and token market capitalization before making a purchase.
  • Be cautious of manipulated liquidity pools and bonding curve systems.
  • Use reputable and trustworthy decentralized exchanges to minimize the risk of errors.

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