Shiba Floki, a Shiba Inu Token Clone Inspired by Elon Musk’s Tweet, Slow Rugs Investors
(Photo : Photo by Executium on Unsplash)

Shiba Floki, a Shiba Inu clone that was created after Elon Musk tweeted that he will be naming his dog Floki, made headlines recently after witnessing thousands of percent gains.

Blockchain data, however, reveal that the token has actually been defrauding investors and is what can be said to be a slow rug.

A rug pull occurs when a cryptocurrency puts liquidity on an automated market maker (like Uniswap or PancakeSwap), lets people buy in, then removes liquidity so people can no longer sell and are eventually left with worthless tokens.

A slow rug, on the other hand, is a form of rug pull in which liquidity isn't exactly directly removed but devs and cryptocurrency token creators slowly sell tokens (often through obscure means) in exchange for actual money that investors put in. This is usually done without the knowledge of the investors most of whom have no idea such is going on.

While unsophisticated investors fueled by the Shiba Inu hype piled money into the Shiba Floki token, the dev wallet that deployed the token was directly selling tokens and splitting tokens into multiple different wallets to sell.

This is based on blockchain data on the BSC Network and according to data from the Poocoin rug checker.

Shiba Floki's rise was mostly propelled by CoinMarketCap and Coingecko's website which ranks tokens based on popularity. 

Due to many probably confusing it for another Floki Inu token which is more established and has a partnership with a project run by Elon Musk's brother Kimbal, the at the time not-so-popular Shiba Floki quickly racked up volume and saw thousands of percent gains since it had a low market cap, pushing it to the top gainer position on CoinMarketCap and featuring prominently on CoinMarketCap's homepage as a result.

News publications that reported about Shiba Floki's gains also helped fuel it's rise. Unsuspecting investors have been the one to bear the brunt, however.

Many existing tokens rally whenever Elon Musk tweets, and several scam tokens often pop up. People often go to cryptocurrency token databases like CoinMarketCap and Coingecko to find these tokens and are generally likely to buy those with high percentage gains.

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