In typical bull-run fashion, a crypto user has just been spotted spending a staggering $113,000 in gas fees in an attempt to purchase $26,000 worth of a newly launched token.
Unfortunately for them, the token was seemingly "rugged" no more than 35 minutes later.
According to transaction data from Etherscan, a single wallet address interacted with a smart contract address on Feb. 13, transferring 10 ETH (worth approximately $26,000) to the contract.
The smart contract then swapped it into Wrapped Ether (WETH) and executed a swap for 30 No Handle (NO) tokens — a newly listed ERC-404 token. The proceeds of the swap were then deposited to another wallet address.
A user spent $113,000 on gas for a $26,000 transaction: Source: Etherscan
Transaction data from Web3 portfolio tracker DeBank shows the transaction incurred a total gas fee of 42.8 ETH, worth $113,211.
Outsized spending on gas fees is viewed by some as a sign of a bull market when users tend to throw caution to the wind in the hopes of making huge returns on obscure tokens.
The wallet appears to be the initial caller of the smart contract. Source: DeBank
Unfortunately for the user, the price of a single NO token spiked from $6.80 on launch to a whopping peak of approximately $70,000 before plummeting back down to near $0 within a span of 35 minutes, per Dex Screener data.
Lookonchain described the user as having been "rugged" after the price of the NO token fell abruptly to near $0.
The price of the NO token whipsawed from $6 to $70,000 and back to $0 in less than 40 minutes Source: Dex creener
Meanwhile, the NO token has been given a safety score of 0 out of 100 and flagged as “high risk” by blockchain analytics service Crypto Monkey, which notified users in a Feb. 13 X post that the token’s contract had not been renounced and that just two addresses held 90% of the token.
Related: Blockchain community divided over new ERC-404 tokens
It’s unclear if the user was attempting to snipe the launch of the new token or if it was simply a “fat finger” error when interacting with the smart contract, however, the high gas priority fee suggests it was likely the former.
The wallet address has been capitalizing heavily on the burgeoning ERC-404 trend, netting over $1.1 million in profit on Pandora tokens — the project that has been attributed with launching the ERC-404 craze after going live on Feb. 5.
ERC-404 is an unofficial, experimental token standard that attempts to bind ERC-721 nonfungible tokens (NFTs) to ERC-20 tokens, allowing for what some have described as fractionalized NFTs.
This allows multiple wallets to each own a portion of a single NFT and use that portion to trade or stake for loans.
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