Snowdog has crashed over 90% following the protocol’s planned token buyback.
During the buyback, only 7% of SDOG holders were able to sell their tokens at a profit.
Some members of the Snowdog community have accused the developers of using the buyback to exit their positions first, leaving everyone else holding the bag.
Share this article
Snowdog, a self-styled decentralized reserve meme coin, has been accused of pulling the rug on its community after crashing over 90%.
Snowdog Plummets 90%
SnowdogDAO has sent investors reeling this Thanksgiving.
The Avalanche-based OlympusDAO fork plummeted over 90% Thursday night after the protocol’s planned token buyback resulted in a huge selloff.
SDOG/USD chart. Source: CoinMarketCap
Snowdog, which styles itself as a “decentralized reserve meme coin,” allowed users to mint SDOG tokens at a discounted rate by depositing other assets as collateral. Snowdog attracted liquidity in much the same way as OlympusDAO, the first protocol to utilize the so-called “liquidity flywheel” model. In recent weeks, many OlympusDAO forks have emerged on Ethereum ( $0.00 ) ( $0.00 ) ( $0.00 ) and other blockchains amid growing interest in the protocol.
The OlympusDAO liquidity flywheel (Source: @RyanWatkins_)
Snowdog differed from other OlympusDAO forks in that it only planned to be active for eight days. The protocol announced on launch that it would use all of the assets in its treasury after eight days to orchestrate a “massive buyback” of Snowdog tokens ahead of transitioning into a meme coin by fractionalizing each SDOG token by a factor of one billion.
The planned buyback resulted in many holders accumulating SDOG tokens in anticipation of a substantial price increase. However, when the buyback started late Thursday, the Snowdog token instead plummeted, eventually losing over 90% of its pre-buyback value.
The price crash caused many in the Snowdog community to accuse the developers of “pulling the rug” by using the buyback to exit their positions first, leaving other investors stuck in their positions as prices crashed.
However, others have refuted this accusation, stating that the transaction data does not show any evidence of foul play.
Early Friday morning, the Snowdog team published a post-mortem report detailing why the SDOG token crashed. The developers apologised for failing to clearly state how the buyback would likely affect prices. An excerpt of the report read:
“We wanted to orchestrate an event that could capture the attention of the crypto ecosystem while procuring entertainment to people watching it from the sidelines… For the $SDOG price to be above market price before buyback (~$1200), sellers needed their $SDOG to be part of the first 7% of the supply being sold.”
With only 7% of the SDOG supply having the potential to be sold at a profit during the buyback, many holders were forced to sell below market price or face further losses, resulting in a 90% drawdown.
The post-mortem also outlined future plans for the SDOG token, detailing how the team aims to create long-term value for holders. However, many community members have declared that they have lost interest in the project following the crash. Whether the Snowdog community will be able to recover from the incident remains to be seen.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
Olympus DAO Posts Rally, Aiming for New All-Time Highs
Olympus DAO has bounced off its summer lows and is rapidly approaching a new all-time high. The project’s clever tokenomics, strong community, and meme culture are all driving adoption. Olympus…
Avalanche Endures Wild Ride Amid Debate, Price Action
Avalanche’s AVAX token recorded another new all-time high of $144.96 Sunday amid intense debates between some prolific industry figures concerning the Avalanche blockchain and Ethereum ( $0.00 ) . On Monday, however, Avalanche experienced…
How SocialGood Is Offering 100% Crypto Cashback on Online Shopping
In recent years, the rise of Bitcoin ( $42,329.00 ) and tokenized assets has made the cashback vertical ripe for disruption. Within the cashback market, blockchain-based loyalty networks are rising in popularity among…
Avalanche DeFi Platform Vee Finance Suffers $35M Hack
DeFi money market protocol Vee Finance had been exploited for $35 million worth of Ethereum ( $0.00 ) ( $0.00 ) ( $0.00 ) and Bitcoin. $35 Million Lost in Vee Finance Attack Vee Finance has been hit for…