Cryptocurrency

169 New DOGE contracts created on Ethereum amid memecoin’s rally, investors lose thousands of dollars

Amid popular memecoin Dogecoin’s stupendous rally—about 25 percent in the last 24 hours and an eye-watering 150 percent over the past week—a mind-numbing 169 new DOGE contracts or agreements between two parties to buy or sell Dogecoin at a predetermined future date and price were created on the Ethereum and Binance blockchains, leading to thousands of dollars of investors’ wealth getting wiped out.

The latest rally in Dogecoin was apparently fueled by a tweet from Tesla and Spacex CEO and new owner of Twitter Elon Musk, which depicted a Shiba Inu dog wearing a Twitter T-shirt sitting beside a Halloween pumpkin that had Twitter’s logo etched on it.

DOGE contracts by the name of “LittleHotDoge”, “TwDogElon”, “BABYBABYDOGE” and “TwitterDoge” populated both blockchains immediately after Musk’s tweet.

According to blockchain security firm Peckshield, out of the 169 new DOGE contracts, the price of 67 tokens fell by more than 90 percent after they were issued, suggesting that most of the contracts were intended to scam investors.

Further, the price of 45 tokens fell 100 percent, turning their value to zero, and leading to a cumulative loss of thousands of dollars for investors.

Peckshield described 42 of the tokens as honeypots, a term used to describe unauthorised tokens that alter the permissions on unsuspecting users’ crypto wallets with the intention of eventually moving all their tokens from those wallets into one under the control of the bad actor.

Peckshied did not specify the fate of the remaining 15 contracts.

Other major cryptocurrencies like Bitcoin, Ether, Ripple and Cardano were up 7 percent, 20 percent, 3 percent and 16 percent, respectively, over the last 24 hours.

Meanwhile, pseudonymous cryptocurrency analyst SmartContracter revealed to his 215,000 Twitter followers that he was contemplating shifting his funds from Bitcoin to Dogecoin for the next few months at least as the Doge/BTC chart was the “most crazy bullish thing” he had seen in a long time.

According to the analyst, an inverted head-and-shoulders pattern that has been present for a year and that “barely anyone is even talking about” is what gives the chart a positive appearance.

A head-and-shoulders pattern is a chart pattern that denotes a change in trend from bullish to bearish. An inverted head-and-shoulders pattern, meanwhile, denotes a change in trend from bearish to bullish.

Musk’s fascination with DOGE

Musk has supported DOGE in the past on a number of occasions, tweeting about the memecoin and sharing its memes. All of Musk’s businesses including Tesla, SpaceX and The Boring Company accept Dogecoin as payment for goods.

Even SpaceX’s 2022 lunar mission was named DOGE-1.Musk’s tweets and endorsements are known to frequently pump up prices of the memecoin.