DeFi Project KORE Reaches a Market Cap of $113 Billion Before Pulling the Rug

In the fast moving world of Ethereum projects, a week can go by like a full year. The rise of Uniswap in 2020 has given centralized exchanges a run for their money. New projects no longer need to worry about exchange listings, fast tracking the process of providing initial liquidity for their tokens. Unfortunately, unregulated listings has also made it much easier for scams to cash out, pulling the rug on investors.

A market cap to surpass Ethereum

The most recent chapter of these so called “rugpulls” was written yesterday, when KORE’s market cap (a fork of the yield farming project CORE) suddenly jumped to $113 Billion (technically, but more on that later) before crashing to practically 0.

KORE is a yield farming project, and a fork of the more popular project CORE. When the smart contract was deployed on Oct 11^th, it had a total coin supply of 10,000 KORE.

In practical terms, the project launched on Oct 18^th, with 726 addresses receiving the token on day one. KORE launched on Uniswap at an initial price of $5.45. As KORE rose in prominence, so did its price, and by oct 31^st the token was trading around the $110 mark. This represents a 20x from its initial price not even 2 weeks earlier! But the numbers that would make regular investors foam at their mouths aren’t the exception for DeFi projects. Rather, greed has become the focus as innovative projects immediately get forked half a dozen times after being deployed.

The fun came to an abrupt halt on Oct 31^st, when devs used a backdoor to the smart contract to mint 1 billion fresh tokens! Yes a billion with a B, or 100,000 times the initial supply, immediately pumping the total amount of KORE from a timid 10K to a proud 1,000,010,000 tokens. With respect to the token’s price at that time, the following became the new tokenomics:

KORE’s new (nominal) market cap of $113 Billion(!) would be enough to rank it on the #2 spot and second only to the king of cryptocurrencies, Bitcoin.

But then, 980 million of these 1 billion fresh tokens were then dumped on Uniswap in one single transaction. The price was left decimated. The total profit from this rugpull? A whopping 898 ETH, ~350K US$.

Conclusion

There’s no doubt that Ethereum in general, and DeFi more specifically, have seen the most interesting advancement in the crypto industry in the past year. Innovation drove a lot of the now well established players.

Alas, their success has attracted a lot of imitators. The most notorious of these forks was Sushiswap forking Uniswap, while doing minor adjustments to the fee structure and adding the SUSHI token to its platform. Uniswap was able to recover from this rather quickly by launching its own token UNI and airdropping it on the community.

Trading on Uniswap can be very lucrative, and holds equally as large risks and pitfalls. Trading new and unaudited projects is not recommended for newcomers. As a rule of thumb, any smart contract with a “mint” function in it can be instantly “rugpulled” by malicious developers. Trade at your own risk, and as the now infamous crypto adage says, always do your own research!

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