What happened
A token that rose more than twenty thousand percent in a week and that nobody was able to sell, by design.
| When | November 2021 |
| What kind of failure | Honeypot rug pull |
| What it cost | About $3.3 million, and a total loss for every buyer |
The version the public saw
SQUID launched during the peak popularity of the television series, claiming to be the token for a forthcoming play to earn game with the same theme. It had a website, a white paper and a Telegram group, and was covered by several mainstream news outlets as a story about the show's popularity.
Underneath the same period
The contract contained an anti-dumping mechanism that prevented almost all holders from selling. Buying worked normally. Selling reverted. This is a honeypot, and it is visible to anybody who reads the contract or runs a sell simulation before buying.
The sequence
The price only goes up
With selling blocked, the chart could only rise. SQUID went from cents to about $2,861 in under a week, which itself attracted more coverage.
Holders discover the problem
Buyers reported being unable to sell. The Telegram group disabled comments. The white paper contained obvious errors and plagiarized text.
The exit
On 1 November 2021 the creators drained the liquidity pool and disappeared. The price went to effectively zero in five minutes.
Nobody is identified
The team was anonymous and no one has been charged.
The signals, before anybody knew the ending
None of these needed hindsight. Each one was public, or checkable, while the money was still there.
- A chart that goes only upward, which is a symptom rather than a strength
- No connection to the intellectual property being invoked, which was never claimed by the rights holder
- A white paper with plagiarized text and basic errors
- A community channel where comments were disabled
The aftermath
No arrests. The funds moved through a mixer within hours. The case is regularly cited because the fatal flaw was machine checkable before anybody bought, in seconds, for free.
The part that changes what you do
Every honeypot is detectable before you buy. Simulate a sell, which several token checkers do automatically, and read the contract for transfer restrictions. A chart that only goes up is not a token performing well, it is often a token you cannot exit.
Common questions
How do I check for a honeypot?
Why did news outlets cover it?
Is this still common?
Where to go next
Other cases like this one
Would your setup have survived this?
We go through where your coins actually sit and who is holding them, and what happens to each of those if the company behind it fails. No sales pitch, and usually about an hour.