Ethereum's co-founder sold off 500 trillion SHIK tokens he had been gifted — causing their value to plunge by a jaw-dropping 77% in just 25 minutes.
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Vitalik Buterin has offloaded memecoins worth almost $700,000 — causing the value of these largely illiquid tokens to plummet.
For years now, many projects have opted to send a substantial chunk of their supply to Ethereum's co-founder — confident that he wouldn't end up using the tokens.
That theory was put to the test last year when Buterin offloaded Shiba Inu tokens worth $1 billion — causing the "Dogecoin killer" to lose 44% of its value in 24 hours.
At the time, Buterin had announced that he was donating the altcoins to a fund supporting India during the coronavirus pandemic. The country had been struggling with a shortage of oxygen and other crucial supplies as COVID deaths mounted.
Cybersecurity experts at PeckShield, who have been keeping a very close eye on Buterin's wallet, revealed that he had dumped a jaw-dropping 500 trillion SHIKOKU tokens — gaining about 380 ETH (worth approximately $590,000) in the process.
CoinMarketCap data reveals that this has had a devastating impact on the value of SHIK. Prices plunged from $0.00000001386 to $0.000000003091 — and while this decline might seem negligible given this memecoin's worth fractions of a cent, that amounts to a fall of 77.7% in just 25 minutes.
Meanwhile, Lookonchain said the sell-offs didn't end here — with 50 billion MOPS also going under the hammer for $2,000, and 10 billion CULT tokens fetching $91,000.
Why?
There's little doubt that these transactions will leave investors in these memecoins incredibly exasperated — with scant liquidity causing eye-watering price crashes.
But it's important to remember that Buterin never asked for nor wanted these tokens — and to make matters worse, he could be liable to pay income tax on these airdrops.
Those who created these altcoins can't say they were warned. Back when Buterin announced that he was offloading all his Shiba Inu, he had this message:
"For anyone making coins (or DAOs, or whatever else) in the future — PLEASE DO NOT GIVE ME COINS OR POWER IN YOUR PROJECT WITHOUT MY CONSENT! I don't *want* to be a locus of power of that kind. Better just to print the coins into the hands of a worthy charity directly (though do talk to them first.)"
Shikoku has been putting a brave face on Buterin's decision to sell.
On Twitter, the project urged its followers to not send hateful messages to the Ethereum co-founder — and conceded that, ultimately, it was his decision. While its Twitter account admitted that the transaction was "disheartening," Shikoku believes that it could be a "blessing in disguise," adding:
"Now that he has sold, there are no whales left in the project. A truly decentralized community can now form in the wake of his actions."
If true decentralization had always been the goal, some might ask why Shikoku had opted to send a staggering 500 trillion tokens — 50% of the total supply — to one person in the first place.
Picture courtesy of John Phillips/Getty Images for TechCrunch
