Crypto Trader’s $139K Gamble on ‘No Handle (NO)’ Token Ends in 35-Minute Rugpull Disaster

Imagine spending a fortune not just on buying a cryptocurrency, but also on the transaction fees, only to see it vanish into thin air in less than an hour. Sounds like a nightmare, right? Well, for one crypto trader, this became a harsh reality with the new ERC-404 token ‘No Handle (NO)’. Let’s dive into this rollercoaster of a crypto mishap.

The $139,000 Crypto Bet Gone Wrong: A 35-Minute Rugpull Story

In the fast-paced world of cryptocurrency, fortunes can be made and lost in the blink of an eye. Recently, a crypto trader experienced the brutal side of this volatility, learning a very expensive lesson about the risks associated with new tokens and ‘rugpulls’.

• This trader decided to jump on the hype of the newly launched ERC-404 token, ‘No Handle (NO)’.
• They invested $26,000 to purchase 30 NO tokens.
• In a rush to be among the first holders, they splurged a staggering $113,000 on gas fees!
• Tragically, just 35 minutes after their purchase, the value of NO token plummeted to zero in what appears to be a classic ‘rugpull’ scenario.

Let’s break down what exactly happened and what we can learn from this costly crypto adventure.

Decoding the Transaction: $26K Investment, $113K Gas Fee

Thanks to the transparent nature of blockchain, we can trace the transaction details on Etherscan. Here’s a step-by-step look at how this unfolded:

1. On February 13th, a crypto wallet initiated a transaction with a smart contract.
2. The wallet transferred 10 ETH (approximately $26,000) to the smart contract address: Smart Contract Address.
3. The smart contract then converted the ETH into Wrapped Ether (WETH).
4. Using the WETH, it executed a swap to acquire 30 units of the newly launched ERC-404 token, No Handle (NO).
5. The swapped tokens were then deposited into a different wallet address: Wallet Address.

See Also: Here’s How This Trader Turned 1 ETH into $59K In 11 Hours Leveraging MINER Token

The transaction details on DeBank reveal the astonishing gas fee of 42.8 ETH, which at the time was worth $113,211. This brought the total cost of this crypto endeavor to a whopping $139,211 for just $26,000 worth of tokens – tokens that soon became worthless.

Why Such High Gas Fees? The Rush to Snipe New Tokens

Spending such an exorbitant amount on gas fees might seem irrational to many. However, in the world of crypto, especially with new token launches, there’s a phenomenon known as “sniping.” Traders attempt to be among the very first to buy a token immediately upon launch, hoping to capitalize on the initial price surge.

High gas fees are often used to ensure transactions are processed quickly, jumping ahead of others in the queue. This trader’s massive gas fee suggests they were likely trying to snipe the launch of NO token, anticipating a quick profit.

The 35-Minute Price Rollercoaster: From $70,000 Peak to Zero

The price action of the NO token was nothing short of dramatic, albeit short-lived. According to Dex Screener data:

• At launch, the price of NO token was around $6.80.
• It then skyrocketed to a peak of approximately $70,000.
• Within just 35 minutes of its peak, the price crashed back down to near zero.

Lookonchain, a crypto analytics platform, aptly described the trader as being “rugged” after witnessing this catastrophic price drop.

Red Flags and Warning Signs: Crypto Monkey’s Alert

Blockchain analytics service, Crypto Monkey, had flagged the NO token as “high risk” even before this rugpull occurred. In a post on X (formerly Twitter) on February 13th, they highlighted critical warning signs:

• NO token received a safety score of 0 out of 100.
• The token contract was not renounced, meaning the developers retained control.
• A concerning 90% of the token supply was held by just two addresses, indicating potential for market manipulation.

These red flags were clear indicators of a high-risk investment, and unfortunately, this trader learned this lesson the hard way.

Was it Sniping or a ‘Fat Finger’ Error?

While the high gas fees strongly suggest the trader was attempting to snipe the token launch, there’s always a slight possibility of a “fat finger” error – an accidental mistake when entering transaction details. However, given the calculated nature of sniping and the wallet’s history, the former seems more likely.

ERC-404 Tokens: Riding the Hype Wave, But at What Cost?

The trader’s wallet address has a history of engaging with ERC-404 tokens, notably making over $1.1 million in profit with Pandora tokens. Pandora is considered the project that ignited the ERC-404 trend after its launch on February 5th.

What exactly is ERC-404?

ERC-404 is an experimental, unofficial token standard attempting to merge the functionalities of ERC-721 NFTs and ERC-20 tokens. As explained by 0xCygaar, it aims to enable fractionalized NFTs, allowing:

• Multiple wallets to own parts of a single NFT.
• Trading and staking these NFT fractions.
• Using fractions as collateral for loans.

While ERC-404 introduces innovative possibilities, it’s still in its early stages and comes with inherent risks, as highlighted by this rugpull incident.

Key Takeaways: Navigating the Risky Waters of New Crypto Tokens

This incident serves as a stark reminder of the risks involved in trading newly launched and unaudited cryptocurrencies, especially those associated with experimental standards like ERC-404. Here are some crucial lessons:

• High Gas Fees Don’t Guarantee Success: Spending heavily on gas fees in hopes of quick profits is a gamble and doesn’t eliminate the risk of rugpulls.
• Do Your Research (DYOR): Always investigate new tokens thoroughly. Check for contract audits, token distribution, and community sentiment before investing.
• Heed Warning Signs: Pay attention to red flags like low safety scores, unrenounced contracts, and concentrated token ownership.
• Risk Management is Key: Never invest more than you can afford to lose, especially in highly volatile and risky assets.
• Be Wary of Hype: New token hype can be misleading. Separate hype from fundamentals and make informed decisions.

Conclusion: A $139,000 Lesson in Crypto Caution

The story of the crypto trader who lost $139,000 in a 35-minute rugpull is a cautionary tale for anyone venturing into the exciting but perilous world of new cryptocurrencies. It underscores the importance of due diligence, risk awareness, and a healthy dose of skepticism. While the allure of quick gains is strong, especially in bull markets, it’s crucial to remember that in crypto, not all that glitters is gold, and sometimes, it’s just a rug waiting to be pulled.

Disclaimer: The information provided is not trading nor financial advice. Bitcoinworld.co.in holds no liability for any trading or investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any trading or investment decisions.

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