Crypto is still new technology, and that is one of the reasons it has been marred by many unsuccessful projects in 2022. Some were intentionally designed to be fraudulent, while most simply failed because of incompetence, not being unique enough or because of hacking. Obviously, there are also a myriad of highly successful and trending crypto projects.
In this article, some of the unsuccessful crypto projects in 2022 will be reviewed, while trying to discover what went wrong and where to go in order to find the daily gainers and losers. Some of the inspiration for this article comes from a recent post on Crypto Lists. Ok, let’s begin.
1. Dark Light
Dark Light is an online game that was based on the BNB Chain. In the game, players could earn rewards in form of Dark Light tokens, and these could be exchanged for fiat currencies. The coin was rug pulled by the contract creator via PancakeSwap. The contract creator exchanged the tokens for $BNB, and they later laundered the funds via Tornado.cash.
2. LV Metaverse/ LV Plus Token
The LV Metaverse project was rug pulled on the 21st of June, and this resulted in the loss of about $1.5 million. The scammers used several wallets to complete the scam. The team in charge of the project has never commented on the rug pull, but they still post regular announcements on social media platforms. LV Plus was meant to be the foundational token of the LV Plus blockchain and would be used to pay for gas and network fees. It would also be available for applications and games.
3. Swello Finance Token
Swello Finance was a DeFi protocol that offered very high APYs of up to 146,848%. Given that most investments offer APYs of less than 10%, this project was highly attractive to investors. The coin was rug pulled by the content creator. Using the pullforBNB function, the creator was able to dump $SWLO against $WBNB via PancakeSwap. The rug pull resulted in the loss of $210,000 in investor funds. The team behind the project acknowledged the issue on Twitter, but they blamed it on a hack.
4. Horizon By Harmony
Horizon Bridge enables token transfers between the Harmony network and Bitcoin, Ethereum, and Binance Chain. The network was hacked in June, and it has been recognized as one of the most massive thefts in recent times. Over a period of about 20 minutes, hackers made 11 transactions from the bridge for different tokens. Since then, they have been transferring the tokens to an alternative wallet in order to exchange them for ETH on Uniswap. In total, the hackers made away with about $100 million in different tokens. The company has put out a $10 million bounty for information leading to the capture of the hackers. Researchers noted that the North Korean hacker collective, Lazarus Group, is likely to be behind the crime.
5. Inverse Finance
Inverse Finance is a decentralized autonomous organization or DAO that allows people to borrow and lend assets. INV or Inverse Finance token is the cryptocurrency that powers the network. The coin is used to govern network products and can be used to vote for future upgrades. Through a Flash Loan exploit, hackers were able to make away with $1.26 million in Tether and Wrapped Bitcoin. This attack didn’t result in the loss of any customer funds, but it left the company in a poor financial state.
6. Gooniez Gang
Customers of Gooniez Gang lost about $9700 through a phishing scam. The funds were stolen in form of ETH, and the company had to refund some of the tokens. The project is still running and uses Web 3 technology to bring together racing and shooting into one ecosystem. To not get in trouble by any phishing scams, a trusted security software such as Avira, Norton or McAfee can help.
7. WinterMute
WinterMute is a leading market maker in the crypto community. The company was exploited for about $27.6 million. This happened when the Optimism Foundation sent tokens to WinterMute as part of an agreement for the company to work as the market maker for the new token. The hacker returned $23.46 million and kept a $2 million bounty.
8. Osmosis
Osmosis blockchain powers a massive decentralized exchange. The blockchain was shut down when a severe issue in its liquidity pools resulted in the loss of $5 million. The flaw was first reported on Reddit, where a user noted that adding cash to the Osmosis pool and then removing it would result in a 50% increase in value. Various users exploited this flaw and were able to increase their positions significantly.
9. ApolloX
ApolloX is a hybrid crypto exchange that was launched in 2021. The goal of the exchange is to make crypto accessible to everyone, including very small traders. On June 8th, the exchange was exploited due to a flaw in its Trading Rewards Contract. The bad actor was able to make away with 53 million APX tokens, and these were worth over $2 million. The crime didn’t affect any users of the network.
10. Baby Musk
The Baby Musk token was a meme coin that tanked nearly 100% after being rug pulled. The coin was named after Elon Musk, the billionaire who has been supporting the adoption of cryptocurrencies, even though he had nothing to do with this scam token. Holders of the token were unable to sell their assets after the developers dumped their Baby Musk coins. In its ICO in February 2022, the coin was able to raise more than $2 million, and it promised to revolutionize meme coins. Always be extra careful when a celebrity’s name is used without their own permission.
11. Luna
Luna was one of the top cryptocurrencies by market cap, and it collapsed because of the de-pegging of the UST. Terra USD or UST was an algorithmic stablecoin that was supposed to maintain a value of $1 at all times. To protect the token, the company behind it purchased Bitcoin reserves, but this wouldn’t help the coin maintain its value. So many Luna coins were being minted to protect the peg of the UST, and this resulted in the coin losing value completely. To start over, Terra Labs renamed their main coins to “classic”, so the old coins are called USTC and LUNC, while the new coins are called UST and LUNA. Still, the project has lost a lot of followers and many projects have changed to other blockchains.
Conclusion
Many crypto projects have turned out to be scams, and others simply failed because of vulnerabilities and incompetence. CoinCodex 5-year-old article with tips for avoid cryptocurrency scams still stands strong. Make sure to avoid cryptocurrencies that don’t disclose general information, such as their head office and owners. Further, if it all sounds a bit too good to be true, it probably is. A good way to start is by reading up on the various blockchains, such as Ethereum, BNB Chain and Solana. That way, you can spot a unique project easier and can learn more about how various crypto network are build and what they are used for. Here is a comparison about a few of the leading blockchains.
Do you want to be first on the ball? With CoinCodex, you can get cryptocurrency market price alerts and notification when some major price changes or news are happening. All you need to do is to set a target price for the alert, and select one or multiple coins that you like to follow.