Fees.wtf is a popular tool that allows users to track the fees they spend on Ethereum. It airdropped its WTF tokens on Thursday, jumping on the larger trend of crypto projects distributing tokens to user wallets based on their usage with those protocols instead of listing directly on the market.
Speculators jumped into accumulating WTF soon after its listing on Ethereum-based exchange Uniswap, hoping that an eventual price rise would net them handsome returns. But the low amount of initial liquidity on Uniswap lead to tears instead of glory.
Liquidity pools on decentralized exchanges (DEX) like Uniswap are unlike how traditional exchanges operate. A pool refers to a set of two tokens provided by users to a DEX, which then uses smart contracts to match trades and automatically increase or reduce prices at which the two tokens trade with each other.
That’s where the problem lay. Blockchain data shows Fees.wtf developers seeded the initial pool on Uniswap with over 2,211 WTF and 0.000001 ether, causing a huge imbalance in the trading pool. This allowed users to sell low amounts of WTF for relatively high amounts of ether, while buyers of WTF ended up purchasing the tokens at a much higher value.
Purchasing WTF after the airdrop could have been a bad bet in hindsight. The token’s prices fell more than 60% in the past seven hours, data shows, falling from an initial $0.28 to as low as $0.09 in Asian hours on Friday.
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