Pond0x DEX Highlights $100M Trading Volume Amid Scam Controversy
Decentralized exchange (DEX) Pond0x has reported a remarkable total trading volume exceeding $100 million, despite swirling allegations of a scam.
In a recent announcement on X (formerly Twitter), Pond0x’s official channel pointed to a Dune dashboard showcasing over $111 million in all-time trading volume as of September 29. The current dashboard data indicates a total trading volume of $112.4 million.
This achievement for Pond0x arrives amidst concerns and accusations of fraudulent activity related to the launch of its native token, PNDX.
The controversy ignited when Pond0x initiated the PNDX token on July 28. Detractors raised questions about the project, which is led by founder Jeremy Cahen, also known as “Pauly,” suspecting it of being a rug pull or exit scam.
$108,000,000 Trade Volume ✅
What comes next…?
— Pond Coin (@Pond0x) September 28, 2023
The concerns primarily revolved around the unconventional approach Cahen employed to launch the coin. On X, Cahen shared a link to an app enabling users to deposit a fixed amount of Ethereum (ETH) in exchange for a predetermined quantity of PNDX. He also disclosed the token’s contract address.
In response, some investors obtained the coin via Uniswap utilizing its contract address, while others deposited ETH into the app to acquire PNDX.
Investors Suffer $2M PNDX Loss
PNDX’s price on Uniswap quickly exceeded the ETH value required for PNDX minting, prompting minters to sell their coins on the market for profit. Critics argued that this process led to a transfer of over $2 million from Uniswap buyers to those who had minted coins via the app.
These actions raised suspicions that the project aimed to deplete funds from investors to benefit Cahen, as the ETH deposited through the app ended up in a contract with no apparent method for fund recovery.
Additionally, coding experts voiced concerns about the token’s lack of a typical transfer function. Instead of restricting token transfers to the owner, PNDX permitted anyone to transfer tokens. This meant that PNDX holders were susceptible to losing their tokens at any time, as any programmer could potentially “abscond” with their PNDX through developer tools.
On July 29, Solidity enthusiast and blogger Sm-stack purportedly demonstrated this vulnerability in a test conducted in Foundry.
Despite these problems, Pond0x continues to garner substantial support on Twitter, with some expressing optimism about the project. Crypto trader and blogger Antony Williams, who claimed to have scrutinized the smart contract code of the app, asserted that Pond0x fundamentally operates as an LP Farm and is not a complete scam.
The app designates each user an ID, determining their share of a pool of Pepe tokens. Users can enhance their Pepe rewards by invoking the “BribeforLevelUp” function, which necessitates a deposit of 0.26 ETH. This ETH is utilized to acquire Pepe tokens, subsequently contributing them to the reward pool.
The exchange also assigns a “Score” to each user, representing their potential rewards from trading fees. Williams contended that these rewards may not be immediately claimable, but he believes the developer likely intends to distribute them in the future. He also suggested that the PNDX token itself may have been created in this manner to avoid potential legal complications.