Crypto
How I got scammed with a meme token

How I got scammed with a meme token

I am going to try to start releasing videos in conjunction with my blog posts. I will try to hash out things a bit different on YouTube vs here so there is benefit if you want to read vs watch. However, I do think both are beneficial for any new comer to help realize potential risks and pitfalls especially when dealing with social media and crypto.

Late last summer, August of 2020, I got wrapped up in a scam on Uniswap. Up to this point, I was careful on buying crypto projects that had some kind of foundation but a meme project BRJ popped out to me on this subreddit called CryptoMoonShots. You can see the original post here: https://www.reddit.com/r/CryptoMoonShots/comments/i9i1re/brj_bull_run_jesus_lmfao_45k_mcap_god_tier/ . I am not sure what I was thinking but reading the channel I just got super into the good vibes. Previously, I avoided meme projects but maybe it was greed, maybe it was just having fun but I threw like $100 into the meme or something like that. I quickly doubled my money and I ended up selling out of the project shortly after because my gut just told me something was off. I really liked the community in telegram but something just didn’t feel right to me. Just trying to figure out the tokenomics of how to make a project, I actually deployed my own smart contract and made $OOTM. The story that the creator of the project said was that he locked up 1 ETH with 800M tokens on Uniswap and the liquidity pool grew to like 90 ETH.

So I made my token, created a liquidity pool with 1 ETH and then I tried buying some of the tokens and reading it to the liquidity pool. The meme token said that some big whale swooped up a large % instantly when he deployed the contract and surprisingly someone else did buy in my token before I could so that possibility did check out. But the thing that was off to me was the speed in which BRJ took off. In 3 days, this token had exploded and by 5 days it reached an insane ATH. The impressive part was that he said he paid someone X number of tokens to make a website and that website was done on day 1 or day 2. In private messages (some time later) I ended up asking him and he said that the guy had made correspondences through Twitter and that was the only means of contact he had with the developer. So that part felt a little off to me. Someone discovered this meme token on the same day that it launched and reached out on twitter and offered to build a website? Possible… But even at the time I had very mixed feelings.

Even though I had cashed out with some profit, I was still observing the project and I was enjoying the community. I ended up buying back in unfortunately when the price started dipping a bit. Basically there were 3 big holders of the tokens. The website developer kept cashing out and every time the project was going up in value he would cash out a couple ETH worth and if memory serves me right he ended up cashing out like $40,000 USD worth of ETH. Basically the whales started fighting and then everyone including the “developer” sold all their portions. Emotions or greed started to get the best of me and I decided to buy up the tokens and keep the project afloat. I sold a lot of my other project’s assets and I started dumping ETH into BRJ. Unfortunately, the developer had noticed that I was buying in and so he ended up rebuying in back with me. After the price had stabilized there was a new found hope until the developer dumped a second time which was like a day or two later. With a small group, we tried to stabilize the project again and rebuild up the community but a lot of the active community members thought the double pumping was too much. Obviously I messed up by not following my own rules and I let my emotions get the best of me. I was not thinking rationally and I paid the price for it. Was I being greedy? Absolutely. Did I get emotionally invested into a project? Yeah. Did I lose more money than I was willing to lose? Definitely. It was a big regret and unfortunately I lost a lot of money to the scam. For all I know, the same exact scammer could have been operating as all the people. He could have been operating multiple accounts/computers and the community that I was enjoying could have been one well coordinated effort. I don’t know and it doesn’t even matter. Since then, I recently had a talk with the project lead back in March. It was a pleasant conversation and even though I lost a sizable amount of ETH which would be worth quite a bit of money, I didn’t have any resentment towards the person. What is done is done and I should have been smarter. 

Overall, it was a good experience. I learned a lot about crypto and contracts and I think it helped shape my decision making when I look at crypto projects. So, to all of you that have been scammed out there, it does get better. Learn from it and learn from others. Stay safe out there and be cautious with any investment. People are out to get your money and they will not feel bad even in the slightest degree of taking it from you.

Final thoughts:

On the discord channel, they asked if I could add a couple more things to this post so I will happily do so.

A summary of the signs that it was a scam

I will say that this is a tricky thought. I got into this project on day 3 or 5 and so it was really new. Obviously there was a LOT of FOMO going on within the community which caused a lot of explosion of growth. But at the time, I was skeptical and I really didn’t know. Shoot even now, I’ll admit that there is a possibility that the original “developer” was honest and innocent. I don’t lean to believe that but it is possible. But here are some questions that I had considered. Note: I don’t know if some of these conversations were in private messages or in the group chat and honestly it doesn’t even matter.

  • The developer said that his only means of communication with the web developer was via Twitter. He didn’t have the guy’s email address or any other means of contact. When the developer supposedly sold his stash he banned the developer. Assuming this is all true, how did the designer reach out to the developer day 1 and offer his services? There are bots and stuff that track new listings and stuff but does this designer message every new beginning project to offer his services? And if so, why didn’t he reach out to me on the experimental project(s) that I did?
  • When the designer left the project he closed off the website. But the developer had the domain name. The designer reached out on day 1 to design a website and then had the developer buy a domain and teach him how to redirect the website domain name to his hosting files? I mean this project exploded so quickly and the website was very well done and within 3 days we had music, website, plenty of artwork. Possible… But too much of a perfect scenario to not be well thought of and coordinated. Despite best practices, many website designers hold the domain as well so why didn’t the designer have the website domain? Why didn’t the developer pay GoDaddy to host his website? It just seems a little odd to me.
  • The developer claimed that after adding the liquidity, the big whale that held 20%+ of the tokens was able to purchase the tokens before he did. When I added liquidity for my experimental project, I did have someone out purchase me for my token so that checked out. But purchasing more than 20% of the supply in 1 transaction requires high tolerance levels and high gas fees. That’s some commitment to dump extra money on a project without knowing much about it.
  • The developer was doing all kinds of crazy bounties for his project and was claiming that people were committed to doing these projects without even showing proof of it. For example, he supposedly did a coingecko application and he said there was going to be a BRJ game made but there was no details on the game nor any evidence on either of those events.
  • Too often the group focused on shilling and less about building. The value of the project is based on the community but if the only thing you are focused on is price action then you have a community with zero depth. What happens when you have negative price action? And out of no where it seemed like there was intense coordination where people got excited all simultaneously to share the project. For a small community, it seem odd to me that you had so many aggressive people sharing the project but it was always synced together so well coordinated. To me, in retrospect, it felt more like a well rehearsed effort or the same person hyping himself up.
  • This developer seemed very child like in his emotions. He said that he only develop the project for fun and blamed constantly for these whales for his problems. Especially over time, I’ve seen this happen constantly where the developers are blaming another outside influencer for their failures of why they can’t continue. For this project, I had dumped a significant amount of money to keep it afloat and when he came back we were supposedly going to work together for the betterment of the community but then later tried to say that I was trying to gain control of the project and left because of that. So, the first whales were stealing the momentum and then supposedly I was trying to steal control but in the end this project was just to have fun and was never meant to be as big as it was… So… Which is it? If I was to lumpsum this with the early bullets, if you are finding irregularities and or scenarios that seemed to be too perfectly coincidences then it is probably a manipulated situation.

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