Beware: Uniswap Now Hosting a Dubious Meme Token
Amidst the Ethereum ETF speculation frenzy, a surge in dubious coins and new assets targets investors caught up in the hype. A new token on Uniswap seems to fit this pattern, with its name indicating a reliance on potential Ethereum ETF approval news to boost its value.
Who Created ETHETF and Why
It remains challenging to pinpoint the exact individuals behind the ETHETF token, as there is no information available either on their official website or on the project's social media channels.
Uniswap has warned that “this token is not frequently swapped on Uniswap and is also not traded on a leading U.S. centralized exchange”. However, the effectiveness of such warnings in encouraging newcomers to conduct thorough research before trading remains a rhetorical question.
The anonymous creators claim that the token is “your gateway to the potential of Ethereum ETFs” and encourage you to “buy the next trend today and be onboard before the ETH rocket launches.
”They believe the approval of spot ETFs from BlackRock and Fidelity will significantly boost the Ethereum price and related tokens.
They expect the new asset’s price chart to prosper based on positive developments around the Ethereum ETF.
Indeed, the capitalization of ETHETF initially surpassed $2 million but fell to $1.2 million following the news that the SEC had delayed its decision on the Global X Bitcoin ETF until December 22.
ETHETF Price Dynamics Since its Launch. Source: Сoingecko
The ETHETF roadmap doesn't outline any far-reaching plans and consists of three stages:
- Launch.
- ETF Approval.
- Aim for the Moon.
ETHETF Roadmap. Source: ethetftoken
Notably, the project has been subjected to an external independent audit. As of now, this audit has not revealed any significant issues in terms of the smart contract's integrity.
ETHETF Audit. Source: www.dextools.io
The Tokenomics of the ETHETF Project
Any Uniswap user can access the ERC-20 ETHETF token. The team behind ETHETF did not conduct a presale, and as per the information on the project's website, 95% of the total 100 million tokens are allocated for replenishing decentralized liquidity pools.
A small fraction (5%) of the tokens is earmarked for expenses related to listing on regulated cryptocurrency exchanges. The timeline for this process, or whether it will happen at all, remains unclear.
ETHETF Tokenomics.Source: ethetftoken
The developers intend to influence the asset's price by implementing a token burning mechanism. Whenever ETHETF tokens are purchased, 2% of the transaction value will be sent to an invalid address, effectively decreasing the asset's market availability. This token burning will stop if and when the SEC approves an Ethereum-ETF.
Could the ETH Price Increase Following an ETF Approval?
The excitement around crypto ETFs is often linked to the historical precedent set by gold ETFs. When the first gold ETF was introduced in America in 2004, providing retail investors access to precious metals markets, the price of gold jumped by 350%. A similar effect is anticipated for cryptocurrencies.
Additionally, if a spot Bitcoin ETF from BlackRock is accepted, an application for an Ethereum ETF by them might also be approved soon after.
However, it's crucial to keep in mind that no exchange-traded fund is immune to asset price fluctuations. Prices are influenced by market forces and investor psychology, not simply by the wishes of the crypto community. Thus, the ETHETF creators’ belief that BlackRock's success will automatically propel their token to astronomical heights seems somewhat unfounded.
It's conceivable that the creators didn't genuinely possess such confidence but rather aimed to attract investors willing to take risks, regardless of the underlying logic.
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