One day, one man invested all his money and property in meme coins…Well, that doesn’t sound like a perfect horror plot, that’s rather an anecdote. But jokes aside, this year was full of scary and frightening stories about the crypto economy. Halloween is an excellent excuse for a short but bracing recap of the scariest ones.
2022 was definitely a nice one for a flow of money from one pocket to someone else’s. An absolute trick-or-treating madness! Time to grab some courage and face the scariest moments of the passing year together!
Story № 1
Crypto Market Crash
As a Forbes article from January 2021 says, ten of the wealthiest cryptocurrency giants lost around $26.9 billion from November 2021, when Bitcoin dropped and the overall crypto market in value, to July 2022.
The total cryptocurrency market capitalization of all crypto was around $3 trillion on November 10; as of July 13, 2022, it was at $883 million. The billionaires became millionaires, but that’s not the worst part, as many smaller investors lost all of their savings.
Story № 2
Axie Infinity Hacked
On July 7th, it was reported that notoriously known North Korean hackers, the Lazarus Group, stole $540 million from the Axie Infinity Platform through an old but gold phishing scam.
Fortunately for the developers, the players didn't leave. They stayed loyal and continued playing the game. The developers were able to refund the players $150 million, thanks to the support of its investors.
Story № 3
The Luna that Smashed Down and Broke Into Pieces
Terra (LUNA) was once the name of an altcoin tied to TerraUSD (UST), a stablecoin with a USD 1:1 ratio. That was done by purpose, and the UST was aimed to control LUNA so that it would be traded 1 UST for $1 worth of LUNA.
The problem was that LUNA defined a UST as being valued at $1, even in those cases when it was not. So, if the UST fell to $0.20, users could purchase 50 UST for $10. Then they could swap their 50 UST for $50 of LUNA and sell it in the open market for a 500 percent profit.
Clever, right? Of course, that scheme worked perfectly well on May 13, 2022, and a whale seized a moment when the price of UST dropped caused by the withdrawal of $150 million. The witty whale took advantage of the sudden decrease in UST value to sell $350 million UST for USDC n Curve, which resulted in an imbalance between the two of UST 85% to 3CRV (15%), according to Forbes.
Story № 4
Solana Wallet Hack
On the 2nd of August, some bad actors stole funds from Solana wallets from several providers. Users didn’t know anything about that, and the exact cause was unclear for a while.
Bad actors stole $8 million through a supply chain hack or a hack where an outside party with relevant information is compromised.
The attacker got the ability to sign transactions on behalf of users, suggesting a trusted third-party service may have been compromised in a so-called supply chain attack.
Engineers of several networks have found that the bug wasn’t caused by a Solana core code but rather in software used by several software wallets.
Story № 5
The Worst Cryptos You Could Invest In
Another scary thing for anyone who’s into crypto is investing in the wrong currencies. Is there anything easier than doing so? With so many cryptos, missing a target is not a big surprise. Catch the top 5 worst cryptos you could invest in this year. We hope you’re not among those lucky guys, though. Here they are:
- Filecoin (FIL)
Filecoin is a decentralized cloud storage network. It’s a backbone for Chain Safe Storage, Estuary, and Space Storage by Fleek. The platform is considered to be a Dropbox and even Google Drive competitor. But despite its ambitious goals, investors have sold off Filecoin in haste. In January, a Filecoin was worth $35.56. But it has since shed 85% of its value, falling to just $5.37 per coin.
- Axie Infinity (AXS)
Axie Infinity runs on a Ronin network, and the bridge that connects Ronin to Ethereum was hacked for $615 million of crypto. When the Ronin bridge was hacked, the price of Axie Infinity tokens was already reeling from the crypto crash. But the news of the hack sent it into an absolute tailspin. It has fallen from $93.86 to $13.92 over the year, a decline of 85%.
- Avalanche (AVAX)
At the beginning of the year, an AVAX token was worth $113.10. It lost a mere $16.63 during an overall crypto bear market from January to March. During the crypto crash of April-May, Avalanche’s daily transactions dropped from almost 900K to only 200K.
Investors lost their faith and confidence in the network because it coincided with a fall in price from $96.47 to $26.43. It has since continued to fall, down to $19.72.
Avalanche has lost 82.6% of its price over the year.
- Solana (SOL)
Solana is a great technological advancement, but unfortunately, there is nothing permanent except change, so SOL crashed this year, too. In January, an SOL token was worth $179.04 but fell to $78.76. After a while, it rebounded to $136.88 by April 3.
And again fell by an additional 50%, from $85.83 to $37.12. In total, it lost 79% of its value since the start of the year.
- Cronos (CRO)
In January, Cronos’ price was $0.59 per coin. Thanks to a crypto crash, it fell to $0.31 by the end of April. In May, Crypto.com announced that it would dramatically reduce Cronos rewards for the lowest-tier cardholders. As a result, Cronos crashed an additional 30%. It still hasn’t recovered, and Cronos is now worth just $0.12 per coin. Since January, it has shrunk to 79.7%.
We do hope you weren’t there when everything drastically fell and crashed, but when in Rome, do as the Romans do. The crypto world is harsh and full of bad and good surprises. This year terrified many people, but remember that any drama can teach you something valuable once you’re ready to learn your lesson.
🎃 Have a Happy Crypto Halloween, folks! 🎃