According to Cointelegraph: A cryptocurrency user spent a whopping $113,000 on gas fees attempting to snipe a newly launched token, only to witness its value plummet to nearly zero within 35 minutes of purchase.
As per Etherscan transaction data, on February 13th, a single-user wallet engaged with a smart contract and transferred an equivalent of $26,000 in ETH. This was exchanged to Wrapped Ether (WETH), which was then swapped for 30 units of a new ERC-404 token, known as No Handle (NO).
However, following a short-lived price surge from $6.80 to a staggering peak of about $70,000, the value of the NO token fell sharply back to near zero, all within 35 minutes. The term "rug pull" was used by Lookonchain to describe the sudden collapse in value. Blockchain analytics service Crypto Monkey flagged the NO token as high risk (0/100 safety score) and informed users that 90% of it was held by only two addresses.
The crypto user in question has been taking advantage of the flourishing ERC-404 trend, having made over $1.1 million in profit from Pandora tokens—a project credited with sparking the ERC-404 craze since its inception on February 5th.
The ERC-404 is an experimental token standard aiming to link ERC-721 nonfungible tokens (NFTs) to ERC-20 tokens. This novel concept allows for so-called 'fractionalized' NFTs, enabling multiple wallets to own a portion of a single NFT, which can be subsequently traded or staked for loans.