Pond0x DEX claims $100M trading volume critics say is a scam
The Pond0X Decentralized Exchange (DEX) has reached more than $100 million in total transaction volume, according to a post on the official website on September 28. Investors previously reported that the exchange's initial token, PNDX, was worth more than $2 million when it launched, with a coin-to-coin transfer function that allowed anyone to transfer without the owner's permission. But supporters say these losses are not the developer's fault.
$108,000,000 trade volume ✅
And counting.
What comes next…?
pic.twitter.com/lpetFqJAkq
— Pond Coin (@Pond0x) September 28, 2023
As proof of the trading volume of Pond0X DEX, the official channel cites a Dune dashboard created by user Mogi, which shows an all-time trading volume of more than $111 million as of September 29.
The PNDX token was launched on July 28. At the time, critics accused the project of being a “runway drag” or an exit scam. The main issue was the unusual way in which the founder of the project, Jeremy Cahen (also known as “Pauly”) raised the coin. In an X (formerly Twitter) launch post, Cahen posted a URL to an app that allows people to deposit a certain amount of Ether (ETH) to receive a certain amount of PNDX. It also reserves the contract address for the token.
In response, some investors used the coin's contract address to buy on Uniswap, while others deposited ETH into the app to receive PNDX. The price on Uniswap rose faster than the ETH needed to mine PNDX, so miners started selling their coins to the market at a profit. Critics say this process has transferred more than $2 million in wealth from people who bought coins on Uniswap to those who spent them using the app. The ETH deposited through the app is locked into a contract with no way to get the money back, with critics alleging that the entire project was designed to siphon money from investors and send it to Kahen.
In addition, coders began to say that the token did not have a standard transfer function. Instead of only allowing the owner of the token to transfer, PNDX allows anyone to transfer tokens. This means that any programmer can “steal” their PNDX using developer tools, so every PNDX owner can lose their tokens at any time. On July 29, Solidity enthusiast and blogger sm-stack reported that they conducted an experiment in Foundry that proves this point.
However, more than two months after the project started, it continues to generate hundreds of fans on Twitter, with responses to official posts regularly like “FEELS GOOD MAN” and “Best DEX, people don't see why. Use something else tbh”.
Great DEX, don't see a reason why people would use anything else tbh.
— Lemur (@OGLemur) September 28, 2023
In the year On July 29, crypto trader and blogger Anthony Williams read through the app's smart contract code and determined how it works. According to him, Pond0x is “basically an LP Farm” and not a complete scam. The app gives each user an ID that determines the user's share of PEPE tokens. Users can increase the amount of Pepe rewards they deserve by calling the “BribeforLevelUp” function. To invoke this function, the user must deposit 0.26 ETH. This ETH is used to purchase Pepe Tokens, which are then deposited into the pool to pay out rewards. The exchange also provides a “score” for each user. Higher scores represent greater potential rewards than accumulated trade fees, all other factors held constant.
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Williams did not say whether these rewards could be claimed immediately, but asserted that the developer “probably” intends to pay them at some point in the future. He also said that the PNDX token is “primarily worthless”, which may have been created this way to “avoid legal problems”.
The project launched its decentralized exchange on September 1. According to the Dune dashboard mentioned above, this DEX has now reached more than $100 million in trading volume, which shows that at least some traders are not deterred by Pond0X's criticism.
