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On Wednesday, Ethereum co-founder Vitalik Buterin annihilated the market by rugging the dog-meme coins in a couple of hours. No dog meme coin was safe from Vitalik; it started with AKITA coins, then quickly moved on to SHIB tokens, and then ELON tokens. These coins lost 55% to 77% of their value and have yet to show any signs of recovery despite TikTok Investors tweeting that they are “buying up his tokens.” The last time such a rugging was done was by Litecoin creator Charlie Lee when he sold his LTC right at the Jan. 2018 market top. In hindsight, these meme coin developers should have never entrusted 50% of their coin supply to Vitalik. The SHIB’s whitepaper says,
“Our founder also chose to send 50% of the total supply to Vitalik Buterin's wallet because, in his words, We sent over 50% of the TOTAL supply to Vitalik. There is no greatness without a vulnerable point, and as long as VB doesn't rug us, then SHIBA will grow and survive.”It’s to be seen if these DOGE-inspired memes coins will be able to attain some of the value back.
Philanthropy at its Finest
Ever since this happened, Tesla CEO Elon Musk has taken the limelight from Vitalik by crashing Bitcoin to $46,000, saying the company will no longer accept Bitcoin for car purchases, citing environmental concerns. However, Vitalik dumping these tokens saw the crypto market divided on if it was a good move or a nefarious one. This makes sense given that Vitalik sent these coins to charity. A whopping $500 million were sent to Gitcoin — “the single largest financial donation to an open-source project in history.” Gitcoin is an open-source platform on the Ethereum blockchain that allows developers to collaborate and monetize their skills with bounties. A whopping 50,693,552,078,053 SHIBA coins (50.7 trillion SHIBU was worth more than $1 billion) were sent to India's Crypto Covid Relief Fund. “We thank Vitalik Buterin for his donation…” tweeted the Relief Fund, a community-run relief Fund championed by Polygon (MATIC) founder Sandeep Nailwal to combat the spread of Covid-19 in India. While they decided “to do a thoughtful liquidation to ensure we meet our COVID relief goals. We have decided to convert the donation slowly over a period of time,” the crypto community urged them to liquidate them at the moment before the coins become worthless. Punit Agarwal said,“As said in the WSJ article, We're working on finding ways on how we can utilize the funds without harming retail investors of SHIB. The team is working very closely on it.”Much like the huge donation to Gitcoin, this one also ranks among the biggest ever philanthropy efforts. Further donations were made to Artificial Intelligence at MIRI, Charter Cities Institute, and Methuselah Foundation. “This is great for the image of crypto - particularly in a country that has suggested banning it…” noted one enthusiast on Twitter while Rober Leshner, Compound Finance founder, quipped, “This is the most legendary tax deduction using an unmarketable asset.”
Deontology vs utilitarianism
This unleashing of Vitalik on dog coins’ madness has affected the retail users that made their way into the crypto market through these coins very recently, like Dogecoin, has been onboarding new users to this industry. Interestingly, these coins were not listed on centralized exchanges initially. However, it didn’t take much time for them to capture the immense volume and give people the opportunity to short these coins as well. The retail noobs were actually utilizing decentralized exchange Uniswap. Trader PepeXBT said,“Speculators profiting from meme coins are likely to re-invest profits in other coins and inject $ into crypto. If you rug them all at once, they’re unlikely to invest more, and now a charity needs to liquidate 1B worth of meme coins. Bearish af IMO, crypto needs fresh capital now.”This is the reason Uniswap has been earning more than double the fees of Bitcoin this week, and on the Ethereum network, the fees yet again went to new all-time highs. Even Vitalik’s own transactions while transferring these coins were affected due to this. Trader Big Dog wrote,
“He dumps them because he can’t fix the gas issue that’s plagued Ethereum for years Then donates (other peoples money) not any of his own says it’s “for charity.” Your coin is fundamentally broken, and this is a cop out.”While it can also be pointed out that at last, someone would have been left holding these bags, given that they had been pumped into a straight vertical line for the past few days, Vitalik has simply done it single-handedly and accelerated the process. Fiskantes of Zee Prime Capital said,
“Again deontology vs. utilitarianism, I am with utils here...these bags would be dumped sooner or later, this way they can at least work to do some good.”It can also be argued that these coins simply had no utility, and simply were made for the purpose of speculation. But then again, the same thing happened during the 2017 ICO mania and the recent DeFi summer. At this point, everyone is waiting for Vitalik’s explanation behind his decision to do this.