On Thursday night time, crypto twitter was overrun with folks begging others to click on their referral hyperlinks for one thing referred to as WTF. If you noticed any of the various groveling tweets, you might have been questioning “WTF?” your self.
“IF YOURE CLAIMING THE $WTF AIRDROP PLS USE MY REF LINK https://meatspin.com,” learn one tweet mocking the frenzy (don’t go to that web site, which may be very NSFW).
For some time now, Fees.wtf has supplied a easy and dependable service: enter your pockets deal with and it tells you the way a lot you’ve got spent on Ethereum blockchain transaction charges (fuel), in addition to what number of of your transactions failed and the way a lot these value you. Unsatisfied with this, the challenge determined to launch its personal token—named WTF—and an airdrop that might award tokens based mostly on fuel spent and failed transactions.
In case you don’t know what that’s, an “airdrop” is an more and more common method to bootstrap a brand new cryptocurrency. Simply: Decide on some metric to distribute a brand new token (like fuel spent on Ethereum) and let folks declare it. The WTF airdrop additionally promised to supply an NFT that might give entry to a “pro” model of the service that might work on a number of blockchains, however got here with one other twist that had some frustrated users declaring it a “Ponzi” or “pyramid”: a referral system that pays out ETH based mostly on how many individuals you recruited. On Thursday, these WTF referral hyperlinks started to flood Twitter.
The system is deceptively simple: There is a .01 ETH service price to register your deal with earlier than claiming your tokens, and the extra WTF you burn (i.e. ship to a dead-end deal with), the extra you “upgrade” your referral hyperlink rewards. If you burn no WTF in any respect, you get .001 ETH (10 % of the price) from every referral—burning as much as 10,000 WTF will get you .005 ETH (50 % of the price) from every referral. This successfully signifies that the system is about as much as give a bonus to rich individuals who have spent a ton of cash in Ethereum—and thus have a ton of WTF to burn—and have giant followings to unfold referral hyperlinks to and reap extra token rewards.
As The Block’s Tim Copeland observed, although, this referral system solely simply prints cash if WTF is price lower than the proportion of the service price you’re getting at any explicit stage. For the sake of argument let’s say WTF is price .01 ETH (the bottom value to say) and also you burned 10,000 WTF for max rewards. Referring 1,000 folks would reward you with 5 ETH, however you already burned 100 ETH price of WTF to get that reward. To break even, you’d want 200,000 folks to make use of your referral hyperlink.
This ought to’ve been the primary signal of potential issues baked into the construction of the token, but it surely all got here to a head on Friday when the airdrop proved to be an entire and utter catastrophe that includes bots nuking one another in a zero-sum wrestle that brought about chaos within the token’s value.
As detailed in one viral analysis from Twitter consumer meows.eth, the preliminary pool of liquidity to commerce with was comparatively small—simply over 2,211 WTF and .000001 WETH (wrapped ether). According to meows.eth, buying and selling bots instantly started duking it out and despatched the token value briefly hovering, turning the referral system right into a cash pit and wreaking havoc on everybody else in a couple of alternative ways.
The first bot purchased 2,211.45 WTF for two ETH, spiking the value and leaving little left for different bots that stored shopping for the remnants of the pool. Another bot paid 10 ETH for the final WTF obtainable (solely 0.000149 WTF), that means that at that time the buying and selling pool had quite a lot of ETH in it and successfully no WTF. Taking benefit of this example, the bot operator shortly bought .001375 WTF for the absurd sum of 58 ETH ($191,400), and paid practically $3,000 in fuel to make sure its transaction was settled earlier than another bot’s or dealer’s.
Other merchants have been screwed over as a result of they didn’t know how one can correctly arrange decrease tolerances for slippage (when costs actually slip between the time an order is crammed and executed) and ended up fulfilling orders for considerably much less WTF than anticipated at a considerably greater value. One consumer by accident swapped 42 ETH (over $132,000) for 0.00004 WTF, though WTF was solely price $0.00000525172 per token, on account of this.
As for the way the token is doing now… Well, it’s not going properly. After the preliminary value spikes, the value dropped to round 30 cents and has tumbled even additional, presently sitting at 13 cents in keeping with information from CoinMarketCap.
“I bought $WTF last night and WHAT THE FUCK HAPPENED WHILE I WAS SLEEPING???!!! MY FUCKING HARD EARNED MONEY GONE OVERNIGHT FUCK THIS IM GOING BACK TO SLEEP” wrote one Twitter consumer.
Despite some customers decrying the WTF airdrop as being pyramid-esque, and the final chaos and ache that has come from it, the builders have seemingly made out properly. The token crew will get a fee from each single switch or swap of the WTF token on prime of a reduce of the proceeds from deal with registration, which is then despatched to a growing hoard of practically 8 million WTF tokens (about $1.2 million). On prime of that, the crew just lately solicited donations solely to switch about 150 ETH from the donation pockets to Binance.
All in all, this was on the very least a poorly conceived launch. Like so many different crypto initiatives, it was so poorly deliberate, capitalized, and executed, that it’s virtually indistinguishable from a rip-off. WTF certainly.