A cryptocurrency inspired by the Netflix megahit Squid Game is now effectively worthless after gaining a whopping 310,000% in a week, a cautionary tale of the volatility of memecoins.
The cryptocurrency was created ostensibly as a token for an online game inspired by the survival drama Squid Game, in which heavily indebted adults participate in a deadly tournament of children’s games to win money. The game was to launch in November.
But the developers apparently abandoned the project and sold their tokens, making off with an estimated $3.3 million. Overnight, all social media accounts associated with the supposed game and its website disappeared. Twitter has also flagged and suspended its account due to “suspicious activity.” A SQUID token is now worth less than a penny, down from $38 on Monday just before its meteoric rise.
In a message posted on its official Telegram channel on Monday, the team behind SQUID said it was being hacked and the developer team “does not want to continue running the project as we are depressed from the scammers” and was “overwhelmed with stress.”
The boom and bust appeared to be a classic “rug pull,” which describes how a crypto’s backers cash out and crash the market, leaving small investors holding the bag. In the case of SQUID, there could be as many as 43,000 bagholders, according to BscScan.
The dramatic crash of SQUID did not surprise industry observers.
Chris Berg, an associate professor and co-founder of RMIT University’s Blockchain Innovation Hub, said there were lots of red flags for this SQUID meme currency. “For example, it had minimal social media presence, limited engagement—and most importantly, no clear connection to the actual intellectual property that they drew their name from,” he told VICE World News. Notably, users had reported being unable to sell the coin on PancakeSwap, a decentralized exchange.
Though some memecoins have thrived, Berg said buying them was more gambling than investment. “There are also a lot of bad actors in the cryptocurrency space that want to take advantage of investor FOMO,” he said.
Meme cryptocurrency first emerged in 2013, when two software engineers made Dogecoin as a joke to make fun of the emerging hype around Bitcoin. The OG memecoin, which Tesla founder Elon Musk adores, would later inspire copycats like the Shiba inu coin. Known in short as SHIB, it recently overtook Dogecoin as the ninth-biggest crypto with a $38 billion market capitalization, according to CoinGecko. One lucky investor who bought $8,000 worth of Shiba coin since last August is now theoretically a multi-billionaire—if they could cash out.
There are more dog-themed tokens still, such as Floki Inu, Floki Musk, and Shiba Floki. They are all named after Musk’s dog and, like all memecoins, could go the way of SHIB or SQUID.