Prominent DeFi community members faced a backlash after attempting to engineer a token scheme inspired by the success of MEME.
Notable figures in the decentralized finance (DeFi) community found themselves in hot water after joining a group to cook up a MEME-inspired token with the apparent intention of dumping on unsuspecting investors. Group members claim the whole thing was just a joke that’s been taken the wrong way.
Leaked chat logs indicate that the FEW token ‘experiment’ was conceived by Idea Markets’ co-founder Sam Ratnaker, who started the Telegram group for the project on September 22. EthHub’s Anthony Sassano, Rocket NFT’s Alex Masmej, and Twitter user ‘DeFi Dude’ were amon among those invited to the channel.
This is disappointing to see from people I know & trust. While some would've been doing it as a laugh, others were malicious & looking to profit whether they'll admit it or not.
— Alex Saunders (@AlexSaundersAU) September 22, 2020
Ratnaker took to Twitter to announce the project, describing it as “an experiment to create value for the ecosystem.” FEW’s first 50 holders would each be airdropped 769.23 tokens that would be vested for one year.
The project was intended to follow in the footsteps of MEME — an anarchic token inspired by criticism of the DeFi space that airdropped its supply to Telegram users and then gained 900% in one month (though it has pulled back more recently). Sassano confessed to having been one of MEME’s original airdrop recipients, revealing that he sold the tokens prior to project gathering momentum, missing out on more than $600,000 in profits as of the token’s September 22 high.
However, FEW token failed to replicate MEME’s success, with hundreds of hopeful investors crashing intthe Telegram group and an imposter token being launched on Uniswap within hours of the announcement.
Screenshots of the group’s chat logs quickly began to leak, including a post from Sassano stating “we need people to dump on” and apparent confessions from Masmej and DeFi Dude that the project’s sole motivation was to engineer a “pump” that would line the pockets of those who missed out on profiting from MEME.
Responding to the backlash, group members claimed the whole thing was just an inside joke. Many members have burned their FEW tokens including Sassono who made a long mea culpa stating:
“Since this screenshot is going to circulate like crazy I want to get one thing straight — it was me making a joke when this group was just a few people. I just sent my $FEW tokens to the burn address to prove that I’m not going to ‘dump’ on anyone.”
The FEW controversy comes after a recent surge in unaudited and forked DeFi protocols that have included both dramatic successes and failures.
The high risk/reward ratio in the DeFi sector inspired crypto custody provider Trustology to offer a “smart contract safeguard” or “DeFi firewall” intended to protect institutional clients against poorly vetted protocols.