Examining the recent Shibarium rug pull on BNB chain
- Shibarium rug pull raised security concerns across various networks.
- Binance Smart Chain (BSC) and BNB continued to witness a decline in interest and activity.
In the volatile world of memecoins, rug pulls have become an all-too-familiar nightmare for investors. The recent Shibarium rug pull on the Binance Smart Chain (BSC) serves as a stark reminder of the risks in the meme cryptocurrency sector.
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Things go wrong
The Shibarium rugpull, as revealed by Aegis3’s data, unfolded when an address known as 0x7FE7D9…FE3f1323 executed a massive minting of Shibarium tokens that far exceeded the total supply. Subsequently, the tokens were swiftly sold off, leading to the acquisition of approximately 393.2 BNB.
?RUGPULL ALERT – $Shibarium ?
A #RugPull incident has occurred with $Shibarium on #BSC.
0x7FE7D9…FE3f1323 minted a significantly larger number of tokens than the total supply and then rug pulled by selling tokens, resulting in the acquisition of ~393.2 $BNB. pic.twitter.com/26TmM8gA44
— AegisWeb3 (@AegisWeb3) September 4, 2023
This incident raised concerning questions about the Shibarium ecosystem’s security and its potential repercussions on Shiba Inu, considering Shibarium’s ties to the popular meme token. The sentiment surrounding Shiba Inu (SHIB) has notably soured in the wake of this rug pull.
A decline in weighted sentiment over the past two days indicates growing negative sentiment among SHIB holders.
Accompanying this sentiment downturn, SHIB’s price experienced a significant drop, putting additional strain on investors.
Adding to the challenges, data from Coinglass indicated a spike in short positions, with 55.96% of all positions being shorts. This growing bearish sentiment could further undermine SHIB’s stability.
As the meme coin landscape evolves, competition is on the rise. Memecoins like Dogecoin (DOGE) and Pepe are eyeing a larger market share, potentially encroaching on SHIB’s territory.
How is BSC doing?
The Shibarium rug pull doesn’t just impact Shiba Inu; it also has implications for the Binance Smart Chain (BSC) itself. The incident could erode trust in the BSC network, raising concerns about security and integrity.
Moreover, sentiment around BSC could deteriorate even further due to regulatory scrutiny faced by its parent company, Binance.
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Examining the broader picture, the current state of the BNB/BSC network reveals a decline in activity, with a significant 18.3% drop in the past month. This decline extends to revenue, which has fallen by 16.4%.
These factors collectively paint a challenging landscape for both SHIB and BSC. SHIB faces not only the aftermath of the Shibarium rugpull but also increased competition from other meme coins. Meanwhile, BSC confronts security concerns and regulatory headwinds, which could further dampen investor sentiment.