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The DeFi landscape has witnessed an unexpected trend — the rise of duplicate tokens. Tokens dubbed as "sequels," such as PEPE2, SQUID2 and SHIB2, have mushroomed, captivating investors with the allure of potentially sky-high returns. However, the grim reality is that these tokens often precipitate devastating financial losses for those chasing the elusive 100x return.
Take SQUID2, for example, a token that rose to notoriety almost overnight. Its predecessor, SQUID, remains infamous for being 2021's biggest "rug pull." With SQUID2 following in these dubious footsteps, many are rightly questioning if history is going to repeat itself.
The rise of duplicate tokens is dominating DeFi ⚠️#PEPE2, #SQUID2, #SHIB2 exploded in popularity overnight
— Bubblemaps (@bubblemaps) July 11, 2023
But chasing that 100x will leave you with nothing 🧵↓ (1/4) pic.twitter.com/U4LMSxVpU0
Scrutinizing the token distribution among holders further accentuates these concerns. The top holders of SQUID2, who are all interconnected by Ethereum transfers, possess an alarming 70% of the token's total supply. Such a concentration of tokens in a handful of wallets is a red flag, signaling potential market manipulation.
A similar situation unfolds with SHIB2. A particularly large cluster of interconnected wallets has been spotted, raising eyebrows. Three different wallets received 0.1 ETH each from a single entity, ostensibly to cover gas fees. Collectively, these wallets control almost 10% of SHIB2's circulating supply, suggesting that a single individual or entity may manipulate the token's market.
The story of PEPE2 is no different. After the success of its precursor, PEPE, many investors have flocked to PEPE2. Though some of the significant holdings link back to well-known exchanges like KuCoin and MEXC, the risks inherent in these "sequel" tokens cannot be underestimated.
Investing in these tokens, more often than not, is a perilous venture. The potential for astronomical returns is often outstripped by the risk of total loss. The winners in these scenarios are generally developers or insiders, while average investors bear the brunt of the fallout.
Tomiwabold Olajide
Godfrey Benjamin
