$TEDDY Plunges 99% Due to Alleged Rug Pull

Excited about high profits, many investors suffer heavy losses when they rush into projects with uncertain information.

What Happened to $TEDDY?

DRAC Network, a project positioning itself as a DeFi hub built on BNB Chain, with its main token $TEDDY and product Teddydoge.Finance, lost more than 10,000 $BNB and $2 million due to an alleged “soft rugpull” by the contract deployer.

Vulnerability security platform PeckShield reported the incident on July 25 on Twitter.

According to PeckShield, the contract deployer transferred a large amount of $TEDDY to their wallet, then pumped-and-dumped the price of the token, taking their gains to DEX PancakeSwap and selling them. Due to the sudden and overwhelming selling pressure, $TEDDY immediately plummeted more than 99% in 24 hours, according to CoinMarketCap data. (The project’s market cap currently sits at around $100.)

The DRAC Network development team said they would temporarily close the cross-chain bridge in response to what they called an “attack.”

“We should thank the guy who stole the money because he left behind the heat and community cohesion. This is something money can’t buy. We never gave up on the project and our DRAC chain,” the DRAC Network development team said on Twitter.

The team said they will deploy a new token called $DRAC, that will be airdropped to holders of TEDDY tokens and TEDDY NFTs.

Rug Pull a Top Threat in Crypto

Research firm Chainalysis tracked 24 rug pulls in 2021 causing losses of up to $2.8 billion in the cryptocurrency market. That figure accounts for 37% of the $7.7 billion lost that year due to crypto scams. Furthermore, compared to 2020, rug pulls have increased dramatically in quantity and damage.

A rug pull refers to a scam where a project team builds a product, promotes it methodically, then issues tokens and lists them on DEX exchanges for investors to purchase, providing liquidity to the project.

Either gradually or all at once, according to Chainalysis, “the developers eventually drain the funds from the liquidity pool, sending the token’s value to zero, and disappear.”

BNB Chain’s popularity among small projects and retail investors have made the blockchain a target for scammers looking to make quick scores.

Recently, BNB Chain launched DappBay, an aggregator with anti-phishing features, to mitigate this risk and help protect users. DappBay identified two scam projects even though it had only been released for two weeks.

Source : bsc.news

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