The market value of DEED tokens evaporated by 90% after the opening of Robinhood Chain's Pons platform. The same group issued 53 tokens in series within two months, with a total withdrawal of US$18.43 million. On-chain analysts reveal anti-sniper tax loopholes and harvesting techniques behind stock token packaging.
Author: Zhou, ChainCatcher
On September 22, the token DEED was launched on Pons, Robinhood Chain’s currency issuance platform, and more than 90% of its market value evaporated in less than a day.
Since its launch in July, Robinhood Chain has become one of the most active currency issuance markets. Pons alone has issued nearly 900,000 tokens, according to independent statistics station pons ledger. Under such a density of coin issuance, the collapse of a new coin is not new.
However, on-chain analysts traced DEED's funds and found that the same group of people had conducted dozens of token issuances in about two months, with a total withdrawal of approximately US$18.43 million. Let’s take a look at how they work.
- The profits harvested in the previous round will pay for the opening of the next round.
DEED describes itself as a real estate vault on the Robinhood Chain, claiming that holders can share in the rental income of an apartment portfolio after deducting costs. On September 22, DEED opened on Pons, and its market value once reached $4.23 million.
However, the heat only lasted less than a day. On September 23, Onchain Lens detected that DEED was suspected of having a rug pull. At one point, 110 associated wallets controlled approximately 86% of the token supply and withdrew approximately $700,000 in funds, with the creator also receiving a 68.5 ETH creator fee, worth approximately $188,900. At this time, DEED’s market capitalization has fallen to approximately $55,000, a decrease of approximately 98.7% from its peak.
According to an investigation by on-chain analyst Wazz, DEED is not an isolated incident. The funding behind it comes from another token previously issued by the same group.
The story starts with DRAFT a week ago. On the evening of September 14, 98 wallets holding DRAFT transferred 179.88 ETH to the same address within three seconds. The money was then transferred as a whole to a wallet starting with 0x9d06, where it stayed for a week.
In the early morning of September 22, the money began to prepare for the opening of DEED. 0x9d06 first transferred 50 ETH, and two minutes later, 20 ETH arrived in DEED's capital wallet. Sixteen seconds later, the fund wallet distributed 15.98 ETH to 50 addresses through a batch transfer, including the creator of DEED and 25 wallets that had been set up to be exempt from the platform’s anti-sniper tax.
40 minutes later, DEED opened. The first purchase after the market opens is to build a centralized position for these 25 tax-free wallets. When the buy-in was completed, the creator and this group of wallets already held approximately 86% of the supply.
A second later, they start selling, and the chips are then dispersed into more wallets and shipped one after another. By the time Onchain Lens issues a warning, this round of harvesting has been completed.
The connection between DRAFT and DEED is just a microcosm. Wazz found that the same rhythm repeated itself over and over for more than two months.
Before issuing coins each time, the gang prepares dozens of wallets and puts them on the tax-free list. As soon as the token went online, these wallets took most of the chips within a block or two. When external buyers enter the market, they will sell them one after another, and the proceeds will be collected into a few addresses to become the starting funds for the next token.
Wazz followed this capital chain to string together 45 issuances. In addition, four issuances of initial funds were issued by the same private key, and four other times the sales proceeds were remitted to the same collection address. Ultimately, he attributed 53 releases between July 10 and September 21 to the same gang, most of them through Pons V2.
In order to amplify profits, gangs will also use the same name repeatedly. 0x9d06 On the same day as DEED was funded, another token also called DEED was funded. PINK, CRUMBS and DEED all had three releases each in about a day. Wazz believes that the gang will first use the token of the same name to harvest the traffic brought by the preheating, and then publish the real contract address.
According to Wazz’s estimation, the cumulative withdrawals from these 53 issuances are approximately US$18.43 million. However, this figure only counts the funds taken away from the market by the gang. The counterparties include retail investors, other traders and robots, and are not equivalent to the total losses of retail investors.
DEED as a clue is not large in scale. The highest withdrawals were from CRUMBS and LEGS, at approximately $3.12 million and $2.9 million respectively. Wazz said the majority of the funds remain on-chain as ETH and cannot be frozen.
- The anti-sniper tax stopped the robots, but not the people who had obtained exemptions in advance.
The tax-free list mentioned above is the key to the repeatability of this harvest. It comes from a set of rules Pons designed to prevent bots from jumping the gun.
After the new currency of Pons V2 is launched, it will first trade on a bonding curve. The more people buy it, the higher the price will be. After the curve is sold out, the tokens automatically graduate and enter the Uniswap v4 pool, and the liquidity is permanently locked. The Pons document shows that there is no function of withdrawing liquidity from the graduated token at all.
This design blocks the old way for the project team to withdraw from the pool and run away, but it does not control who can buy the chips at the opening.
In the first few seconds after the new currency goes online, robots that are most likely to be watching the market rush to buy it. To this end, Pons V2 has an anti-sniper tax. Buying after the market opens is subject to a tax of up to 99%, which decays to zero in about 5 seconds, to about 25% at 1 second, and to about 3% at 2 seconds.
This tax is enough to make robots unprofitable, but it also leaves a loophole in the rules. Coin-issuing addresses and creator charging addresses are automatically tax-free, and coin issuers can also specify up to 32 additional tax-free addresses when creating tokens. The reason given by Pons in the document is to facilitate the team to spread the opening buy orders to multiple wallets.
In other words, as long as the currency issuer writes his wallet into the list in advance, he can open a position tax-free in the few seconds when everyone else has to pay high taxes.
Of the releases listed by Wazz, nine since late August have followed the same pattern. The creator exempts 15 to 25 wallets from the anti-sniper tax, and then uses a transaction to collectively buy them, directly shorting the curve, and pushing the tokens into the Uniswap pool. After the opening, the holding ratio of creators and tax-free wallets ranged from 82% to 86%.
These nine opening buys also have one thing in common, they all went through the same unverified contract created on August 28. Wazz said the contract was part of a commercial bundle with many unrelated users and had been used in 25 of 53 releases.
In addition, he also discovered at least two groups that issued coins continuously, but they could not be directly related to this case.
On September 28, security agency GoPlus disclosed that it had discovered a high-risk fraudulent Meme factory on Robinhood Chain, with more than $9 million in flow in the past 30 days, involving hundreds of fraudulent Meme.
This Meme Factory takes another route, which is to allocate tokens to a large number of new addresses with only 4 to 11 transactions, and then sell them in segments through Pons V2’s auxiliary contract and Uniswap routing, creating the illusion of multiple independent traders.
Of the 10 samples listed by GoPlus, only 3 to 8 new wallets were used per coin, with a single coin taking between 2 and 13 ETH. The scale of the single transaction is not large, and the proceeds from the sale are also transferred to a collection address and then used to fund the next round.
According to GoPlus statistics, the total income and expenditure of the last 400 transactions of this collection address is approximately 3,589 ETH, which is approximately US$9.49 million. This is a two-way flow and does not represent net profit. GoPlus pointed out that both cases used a large number of wallets to hide the true concentration of holdings, and neither relied on pool withdrawals or bans on selling. There is currently no evidence that the two are the same gang.
The reason why a large number of new wallets are not conspicuous is related to the currency issuance ecology of Robinhood Chain. According to the Pons ledger, Pons alone issued about 899,000 tokens from July 13 to September 27, coming from about 453,000 addresses. Only about 1.5% of V2 tokens have sold out of the curve and successfully graduated.
On September 8, the peak day of coin issuance, about 90% of the approximately 27,000 addresses participating in coin issuance had never issued coins before. Among tens of thousands of new coins and new addresses every day, dozens of disposable wallets are difficult for ordinary buyers to identify.
- Stock ownership and creator sharing make coin issuance a business
Looking back at DEED's apartment vault, this type of packaging is not uncommon among the gang's tokens.
Among the tokens listed by Wazz, there are names such as Pink Sheets, Stock Miner, Openbell, EQUITY BROKERS, etc. Pink Sheets is the old name of the US stock pink sheet market; CRUMBS, which has the highest withdrawal amount, claims to be able to exchange shopping receipts into stock token rewards.
This layer of clothing is inseparable from the positioning of Robinhood Chain itself, which uses tokenized stocks as its selling point. Pons V2 also allows currency issuers to directly price new coins using stock tokens.
GoPlus previously scanned Pons V2’s coin issuance records and found that 32% of approximately 324,000 coin issuances in 11 days were directly priced in official stock tokens. In short, pairing Meme coins with stock tokens has become a common way of playing.
JINQIAN takes this layer of outerwear to the extreme. In early September, the meme coin was listed on Robinhood Chain through a private coin issuance factory, and the trading pair was a FAMI token using the Farmmi ticker. Farmmi is a mushroom supplier listed on Nasdaq, and the name JINQIAN is taken from the golden mushroom mentioned in its annual report.
According to Nansen, this FAMI is not an official stock token and is not tied to Farmmi’s shares. But the name is enough to make the market think of it. In U.S. stock trading on September 2, Farmmi’s stock price soared by about 350% during the session.
Previously, GoPlus issued a Robinhood Chain risk report showing that the entire supply of this FAMI token is in the hands of the operator. JINQIAN can only be paired with FAMI. Every time retail investors buy JINQIAN, they need to buy FAMI from the operator first. After the heat subsided, operators withdrew approximately $2.06 million in stablecoins.
The packaging is responsible for bringing in buyers, and the creators’ share allows the business to continue round after round.
On Pons, the majority of the handling fee for each transaction is distributed to the token creator. According to Pons Ledger, as of September 27, Pons has accumulated approximately US$180 million in fees, of which approximately US$147 million has flowed to creators.
For groups that continuously issue coins, this is another income in addition to selling chips. Among the samples listed by GoPlus, the income of two tokens comes from the collection of creator fees multiple times. The cost of issuing a token is very low. Once a token becomes popular, the proceeds from the sale and the creator fee will be enough to cover the cost of many previous attempts.
at last
Data shows that the craze for currency issuance is receding. According to the Pons ledger, the number of Pons coins issued in a single day dropped from about 36,000 on September 8 to about 5,400 on September 27. Revenues and expenses are also declining significantly.
In the next few days, Robinhood Chain may usher in a period of testing. On September 29, Robinhood Wallet’s gas subsidy for on-chain exchanges expired. These data will only be truly meaningful if users and transaction volume can be retained after the subsidy ends.
On September 30, Robinhood’s annual HOOD Summit will unveil new products for active traders. As for Pons, the market is also waiting for its next-generation version to be launched. The market expects that the new version will most likely adjust the currency issuance mechanism, fees and graduation rules based on V2.
Generally speaking, the original intention of Robinhood Chain is to move stocks to the chain. The techniques of continuous currency issuance and centralized control of funds at the opening of the market are not uncommon in various chains. Here, they have changed into stocks and real estate. As more and more ordinary investors follow stock tokens to this chain, they may still have to face the same old problems.