The launch of viral cryptocurrency “WTF” immediately turns into chaos and pain

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Thursday night, crypto twitter was invaded with people begging others to click their referral links for something called WTF. If you’ve seen any of the many humiliating tweets, you may be wondering “WTF?” yourself.

“IF YOU ARE REQUESTING THE AIRDROP $ WTF PLS USE MY REF LINK https://meatspin.comRead a tweet mocking the frenzy (don’t visit that site, which is very NSFW).

Fees.wtf has long provided a simple and reliable service: you enter your wallet address and it tells you how much you have spent on Ethereum blockchain (gas) transaction fees, how many of your transactions have failed and how much those cost you. Dissatisfied with this, the project decided to launch its own token, called WTF, and an airdrop that would award tokens based on gas spent and failed transactions.

In case you don’t know what it is, an “airdrop” is an increasingly popular way to start a new cryptocurrency. Simply: decide on a metric to distribute a new token (like gas spent on Ethereum) and let people claim it. The WTF airdrop also promised to offer an NFT that would give access to a “pro” version of the service that would work across multiple blockchains, but it came with another twist that had some frustrated users declaring it to “Ponzi” or “pyramid”: a referral system that pays ETH based on how many people you have recruited. On Thursday, these WTF referral links started invading Twitter.

The system is deceptively simple: There is a .01 ETH service fee to register your address before claiming your tokens, and the more WTF you burn (i.e. you send to a dead end address), the more “you upgrade” your referral link rewards . If you don’t burn any WTF, you get .001 ETH (10 percent commission) from each referral – burning up to 10,000 WTF you get .005 ETH (50 percent commission) from each referral. This effectively means that the system is set to give wealthy people an edge who have spent a lot of money on Ethereum, and therefore have a lot of WTF to burn, and have a large following for spreading referral links and reaping more rewards. symbolic.

Like Tim Copeland of The Block observedHowever, this referral system easily prints money only if WTF is worth less than the percentage of the service fee you are receiving at a particular tier. For the sake of discussion, let’s say that WTF is worth 0.01 ETH (the base cost to claim) and that you have burned 10,000 WTF for maximum rewards. Referring 1,000 people would reward you with 5 ETH, but you’ve already burned WTF’s 100 ETH to get that reward. To break even, you would need 200,000 people to use your referral link.

This should have been the first sign of potential problems embedded in the token structure, but it all came to a head on Friday when the airdrop turned out to be a complete and utter disaster with robots bombing each other in a zero-sum fight that resulted in caused chaos in the token price.

As detailed in a viral analysis from Twitter user meows.eth, the initial pool of liquidity to trade with was relatively small: just over 2,211 WTF and .000001 WETH (wrapped ether). According to meows.eth, the trading robots immediately started to get away with it and briefly pushed the price of the token up, turning the referral system into a money pit and wreaking havoc on everyone else in different ways.

The first bot bought 2,211.45 WTF for 2 ETH, raising the price and leaving little for the other bots who continued to buy the remainder of the pool. Another bot paid 10 ETH for the last available WTF (only 0.000149 WTF), which means that at that point the trading pool contained a lot of ETH and in fact no WTF. Taking advantage of this situation, the operator of the bot quickly sold it .001375 WTF for the absurd sum of 58 ETH ($ 191,400) and paid nearly $ 3,000 worth of gas to make sure his transaction was settled before any other bot or trader.

Other traders got ripped off because they didn’t know how to properly set lower tolerances for slippage (when prices literally slip between the time an order is filled and executed) and ended up fulfilling orders for a substantially lower WTF than expected at a substantially higher price. A user accidentally mistaken 42 ETH (over $ 132,000) for 0.00004 WTF, even though WTF was only worth $ 0.00000525172 per token, as a result of this.

As for how the token is doing now … well, it’s not doing well. After the initial price spikes, the price dropped to around 30 cents and plummeted further, currently standing at 13 cents. according to data from CoinMarketCap.

“I bought $ WTF last night and WHAT THE FUCK DID IT HAPPEN WHILE I WAS SLEEPING ??? !!! MY HARD EARNED MONEY WAS GONE DURING THE NIGHT, FUCK THIS, I’M GOING BACK TO SLEEP, “wrote a Twitter user.

While some users have denounced the WTF airdrop as pyramidal and the general chaos and pain that came with it, the developers seem to get it right. The token team gets a fee from every single transfer or exchange of the WTF token as well as a portion of the proceeds from the address registration, which is then sent to a growing treasure almost 8 million WTF tokens (about $ 1.2 million). Additionally, the team recently solicited donations just to transfer around 150 ETH from wallet for donations to Binance.

All in all, this was at least a poorly conceived launch. Like so many other crypto projects, it was planned, capitalized and executed so poorly that it is almost indistinguishable from a scam. WTF indeed.

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