Bringing rugged tokens back from the dead via NFTs
An experimental platform by the name of RugZombie has arrived on Binance Smart Chain to a warm reception. They claim to bring tokens from scam projects back from the dead via NFTs and staking. The platform has seen a 572% increase in its active users in the last 7 days.
Interestingly, RugZombie claims to be the first resurrected-value-focused crypto dapp on the Binance Smart Chain. Stating that while it can’t prevent or predict the exposure of investors to rug pulls as they have become known, or scam tokens. It is their stated mission to provide value for the victims of rug-pulled projects in a clean way while offering a utility on BSC.
To quickly explain for the uninitiated, a rug pull is the type of scam where the project creator launches a product and then waits for money to come in. After that, they destroy the product by running away with the money. As a result, scam victims stay behind with tokens that don’t have any value anymore.
According to data from DappRadar the RugZombie dapp has attracted 336 unique active wallets to its platform in the last 7 days. A jump of 572% week over week. These wallets completed 1,600 transactions creating a volume of just over $147,000. That’s a lot of dead tokens!
Unfortunately, many users of cryptocurrencies on the Binance Smart Chain have recently subjected themselves to projects without doing proper research. Or “aped” into tokens that have barely launched, resulting in rug pulls and scams. Other tokens lose value as the dev team gives up due to poor price action or trouble in managing projects. Additionally, projects can be exploited by flash loan attacks and succumb to other smart contract risks.
In a nutshell, the RugZombie team has created a dapp from a fork of PancakeSwap to allow users the opportunity to stake dead tokens in what they call GRAVES or TOMBS. In exchange for custom NFT artwork as a consolation prize and the opportunity to earn a yield with its ZMBE token. The experimental platform can be broken down into five main components. Some of which are not live at the time of writing.
- NFT: Custom and unique NFTs for rug pulled tokens in GRAVES (they are only available to those who have been a victim of that rug|). While the NFT will serve mainly as compensation now. The dapp claims they will play a key role in the forthcoming gaming ecosystem in point 3.
- Liquidity & Farming: Unique liquidity pairings with the rug pulled projects in TOMBS for anyone willing to experiment, and earn a ZMBE yield
- Gaming/Entertainment Ecosystem: A custom NFT based game (In Development; see roadmap) among other unique NFT based projects.
- Secondary Market: A peer-to-peer marketplace to buy, sell and trade your rugged ZMBE NFTs and Merchandise.
- Community Building Features: Auctions, special events, and other ways to earn ZMBE and NFTs. The team also states it is excited to move to a place of on-chain governance and give the community the keys to the grave.
The community features are not planned to commence immediately as the team states in its literature that more decentralization is the eventual goal. Also stating that they feel passionate about getting things right before unlocking community features such as voting and governance on emission rates, future graves, and partnerships, etc. Interestingly, I had expected the platform to have been conceived by people that had in fact been victims of such exploits but nothing like that is made apparent. Arguably, that would give the platform a higher trust score.
As RugZobie’s ZMBE token is a farming token, it is inflationary and has no fixed supply, but the circulating supply will be controlled by a variety of burning features which interested readers can look at in more detail here. Inflationary supply can be a cause for concern for potential users of ZMBE. However, the project states that the way it incentivizes liquidity provision is by giving out rewards that require an emission rate, thereby increasing the supply. Moreover, converting dead tokens to NFTs that may have a future value higher than zero appears to be a move without considerable risk.
RugZombie In Summary
Although this experimental platform looks like a very interesting and needed idea at this moment in time it is still too early to tell if they have good intentions. Having been listed on DappRadar recently and having just a week’s worth of data is not enough in this writer’s opinion to gauge anything. Surely the irony of a rug pull occurring on a platform designed to reward those affected by them would be too much – but hey, this is crypto. All bets are off.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in ETH, BTC, ADA, NIOX, AGIX, SAFEMOON, SDAO, CAIT, CAKE, LINK, GRT, CRO, SHIBA INU, AND OCEAN.