SHAR, which was ordered by KOL, plummeted 96%. Are you still following KOL to trade cryptocurrencies?

Jessy, Golden Finance

The wealth effect brought by Goat has once again brought the Meme track to a climax.

From the evening of October 23 to the early morning of October 24, a project called Shar staged a dramatic scene of a market value of nearly 60 million US dollars in just 8 hours after listing, and then plummeted 96% in five minutes.

The reason for this result was that a wallet address sold 500 million SHARs (accounting for 50% of the total supply) at one time. According to Lookonchain's detection, the transaction came from an insider trader, who collected SHARs in more than 100 wallets into one wallet and sold them at 5 am on the 24th.

How did the project gain community attention and reach a market value of 60 million US dollars in a short period of time? Golden Finance found that the Shar project mainly relied on the endorsement of well-known institutions and found well-known KOLs to promote it, thereby gaining trust.

After the market crash, the project party said that it had no funds to continue the project because of FUD.

SHAR's largest dealer earned 13,910 SOL

 The situation progressed too quickly. In just 8 hours, the Shar project staged a dramatic scene of a market value soaring to $60 million and then falling to $3 million.

The SHAR token was deployed at 22:00 on October 23, 2024. At 23:00 that night, within an hour, the price of the token reached a peak of nearly $0.06, with a market value of nearly $60 million. At around 5 a.m. on October 24, the token price fell directly from around $0.035 to around $0.0018. According to Lookonchain's monitoring, the cause of this result was an insider trader who sold 500 million SHARs (50% of the total supply) at a price of 19,620 SOL (US$3.38 million) at one time.

According to the detailed transaction details disclosed by the insider, the insider trader used a total of 5,710 SOLs to buy 665.6 million SHARs (accounting for 66.56% of the total supply) through 16 wallets and distributed them to more than 100 wallets. In the early morning of the 24th, he collected 500 million SHARs from 104 wallets and sold them all at once. This buying and selling behavior earned 13,910 SOLs.

This series of distribution of tokens to multiple wallets and then collection is undoubtedly to cover up the traces of its on-chain operations.

The wallet address that performed this operation cannot be accurately judged as the wallet of the project party, but the one who can take out 5,710 SOLs to buy tokens that account for more than half of the supply is the largest dealer of the project, and it is likely to be the project party.

After the incident, the project responded on X that it had no funds to continue the project because of FUD. In the chat records provided by KOL @0xSunNF who helped promote the project, the project staff who contacted him said that the project’s life was ended because of the tweets released by the whistleblower. At present, the project’s partners and exchanges want to cancel their cooperation with Shar. The project is studying a refund plan, but there is no news yet.

KOL’s Waterloo

The Shar project leaflet stated that many well-known KOLs would support the project. However, after the incident, some KOLs also jumped out one after another to say that they had terminated their cooperation with the project, and some said that they had never cooperated with the project.

In fact, many people did buy the token under the promotion of these KOLs. @0xSunNFT, a KOL with over 100,000 X fans, said that he had cooperated with the project. He had posted two tweets to help promote the Shar project, and both tweets have been deleted.

After the project went wrong, he posted on X that he had not sold the coins he received from the project, and he also paid for the token.

After the incident, @0xSunNFT said in the community that he had not met the project offline. He saw in the video that the project had set up a booth at TOKEN 2049 this year, and made clothes in collaboration with market maker CSL. Based on this judgment, he felt that the project was credible and accepted the project's advertising.

He once said on X that the promotion fee received from the project was settled in the form of a SHAR token, and he received a reward of 1 million SHAR tokens from the project. He also bought 100SOL SHAR himself. (At present, according to the address disclosed by @0xSunNFT, only the record of its 100 SOL purchasing SHAR in two times has been found. It has not been confirmed that it received 1 million SHAR as a reward. It is highly likely that the reward has not been paid to its public account)

At its peak, 1 million SHAR was worth about $60,000, and its current value is about $2,000.

A person who is engaged in the incubation industry and familiar with the promotion of KOL projects told Golden Finance that it is a basic operation for projects to find KOLs for promotion and publicity, and sometimes KOLs will join forces to operate a project together.

And CSL also cut off its relationship with Shar after the incident, saying that it had never cooperated with Shar's project, and that Shar's statement in the project promotion PPT that it had cooperated with DWF was also false.

As for the reason why CSL followed Shar's Twitter, CSL staff also said that this was because Shar attended CSL's event, so he followed their Twitter.

According to the content posted by Shar's official X account, it can be seen that his former Token2049 account held in Singapore in September this year began to send messages. He attended the Token2049 event and cooperated with a project party @CryptoFightWeek. In the boxing match they held, the promotional posters of the Shar project appeared.

And Token2049, you can enter by buying a ticket, which does not endorse this project.

False propaganda, using well-known institutions, and paying KOLs to promote the project, these costs are actually not high. If the reward for KOL promotion is SHAR tokens as @0xSunNFT said, it is nothing to the project party.

At present, some domestic victims have said that they have reported to the police.

Summary

After the incident, a KOL jumped out to say that he had not reached a cooperation with Shar, while Shar's official X said that he had communicated with all the KOLs mentioned. Although he did not reach a cooperation with everyone, he also received their quotes. It can be seen that it is a very common thing for KOLs to take money to promote projects.

At present, investors often follow the recommendations of KOLs to shout orders, especially Meme Coin, which relies on emotions and hot topics. The participation of KOLs can quickly spread the project in the community. In this process, KOLs can not only get benefits from project promotion, but also get close to the project party and get insider information to buy and sell for profit.

It is not uncommon for projects that KOLs shout orders to run away. After cutting leeks on some projects, they can change their names and continue to shout orders to cut leeks. And leeks are like goldfish, with only seven seconds of memory.