In a classic display of bull market fervor, a cryptocurrency user recently made headlines by spending a staggering $113,000 in gas fees in an attempt to purchase $26,000 worth of a newly launched token, only to see their investment evaporate shortly thereafter.
According to transaction data from Etherscan, the user transferred 10 Ether (ETH), valued at approximately $26,000, to a smart contract address on February 13. The smart contract then swapped the ETH into Wrapped Ether (WETH) and executed a swap for 30 No Handle (NO) tokens, a newly listed ERC-404 token. Subsequently, the proceeds of the swap were deposited into another wallet address.
The transaction incurred a jaw-dropping total gas fee of 42.8 ETH, equivalent to $113,211. Such outsized spending on gas fees is often seen as a hallmark of a bull market, where users sometimes take reckless risks in pursuit of astronomical returns on obscure tokens.
Unfortunately for the user, the price of a single NO token skyrocketed from $6.80 at launch to an astonishing peak of around $70,000, only to crash back down to near zero within a mere 35 minutes, as reported by Dex Screener. This abrupt decline led observers to label the user as having been “rugged.”
The NO token received a safety score of 0 out of 100 and was flagged as “high risk” by blockchain analytics service Crypto Monkey. Concerns were raised about the token’s contract not being renounced and the fact that just two addresses held 90% of the token.
It remains unclear whether the user was attempting to capitalize on the launch of the new token or if it was simply a costly error when interacting with the smart contract. However, the exorbitant gas fee suggests the former is more likely.
The wallet address associated with the transaction has been actively participating in the burgeoning ERC-404 trend, reportedly earning over $1.1 million in profit from Pandora tokens. ERC-404 is an experimental token standard that seeks to bind ERC-721 non-fungible tokens (NFTs) to ERC-20 tokens, allowing for fractionalized NFT ownership.
Despite the allure of potential profits, this incident serves as a stark reminder of the risks inherent in the cryptocurrency market, particularly during times of speculative frenzy.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up