Just days after an Ethereum-based decentralized finance (DeFi) token surged 400 percent earlier this week because of users of the anonymous messaging board 4chan, it happened again.
And this time, the altcoin saw gains of more than 400 percent. Much, much more than 400 percent.
The issue is: the token that rallied has no intrinsic value, but people bought it anyway.
Ethereum token registers 100x in two hours
Contrary to what you hear, lightning can strike twice — only in the crypto space anyway.
On May 17, the price of Opyn CDAI Insurance (OCDAI) — a token created by a DeFi protocol known as Opyn that allows users of Compound to obtain insurance on their deposits — rallied 400 percent in two hours.
On May 23, the price of Opyn y.curve Insurance (OCRV) — a token from Opyn that allows users of Curve.fi to obtain insurance on their deposits — rallied by over 10,000 percent in two hours.
OCRV, according to the chart below, rallied from $0.02 to a high of $3.04.
Normally, these tokens rallying means that users of DeFi protocols are fearful of structural risk in decentralized lending or in the underlying market, which could result in them losing a portion or all of their cryptocurrency.
But as Daryl Lau, a research analyst at crypto data site CoinGecko, revealed, the reason why both these cryptocurrencies rallied so high was not that DeFi or the price of Ethereum is poised to collapse.
Instead, it was because of users of 4chan’s ‘biz” page thought they were buying a low-cap “gem,” a cryptocurrency slated to perform really well. One user wrote in regards to OCRV:
“Strap in. Market cap is only like $8k and this s**t is going to explode, already is shilled on Telegram. Opyn could be like TRB months ago… only that… [but] 100 times cheaper.”
And exploded it did, rallying to $3.04 a pop as aforementioned.
What’s crazy is that these users that sent the cryptocurrency more than 10,000 percent higher were buying insurance on deposits they didn’t have. And what’s even crazier, the insurance that OCRV provides expired — expired more than two months ago.
4chan & crypto
As absurd as this story is, it highlights the weird relationship that 4chan and the cryptocurrency space have had for years now.
4chan has always been a hub for cryptocurrency discussion. The site, after all, is anonymous and often anti-establishment — something that ties in with the ethos of many crypto investors perfectly.
Discussion on the platform regarding cryptocurrency, though, is often relegated to what we saw this week — “pump and dumps,” where random altcoins pump thousands of percent on the back of FOMO induced by threads published on 4chan.
Crazy, I know, but seeing the ‘success’ of this week’s pumps, this trend is unlikely to change any time soon.