YouTuber and former Google tech employee Patrick Shyu, also known as TechLead in his channel, released a cryptocurrency called Million Token (MM) on the Uniswap decentralized exchange last Thursday (1st). However, after a huge appreciation of more than 3,000%, its price has been collapsing. Now, the YouTuber of more than 1 million subscribers faces charges of having engineered a “pump and dump” scheme.
Traditionally, cryptocurrency creators carry out intense disclosure of the newly created asset to quickly raise its price while they themselves hold most of the coins, and then sell them off at once. Thus, the developers and those who publicized the scheme (usually influencers) profit while everyone else who bought the cryptocurrency loses.
In Shyu’s case, he himself created a digital asset and publicized it to his huge subscriber base on YouTube. After the launch of the Million Token for the base price of US$1.00, its value soared to US$36 on Sunday, but plummeted to a low of US$12.8 this Tuesday (6), according to data from CoinGecko.
Cryptocurrency is backed by $1 million in stablecoin
In a video posted on his YouTube channel, Shyu describes the Million Token literally as “a million dollar opportunity”. Along with the description on the project’s official website, he explains that he has placed $1 million in USDC, a US dollar-backed stablecoin, to support the price of his initial offer of 1 million MM.
While each unit of the cryptocurrency is worth at least $1, its maximum price has no limit. With a predetermined number of units, the Million Token has a restricted offer, which naturally facilitates its appreciation.
However, the immediate drop in the price of the cryptocurrency after its appreciation of more than 3,000% has alerted many people. Twitter user DCF GOD created a thread to draw attention to a possible pump and dump scam organized by Shyu.
It turns out that the Uniswap decentralized exchange essentially exchanges cryptocurrencies for other cryptocurrencies, rather than operating like a conventional brokerage that exchanges digital currencies for fiat money.
Okay last tweet since I have folks telling me I don’t know how uniswap works
You can ignore all the liquidity stuff and just compare balances
Techlead start balance:
– 1M USDC
– 1M $MM
Techlead current balance:
– 3M USDC
– about 113k $MM
He has sold MM and gained $2M
— DCF GOD (@dcfgod) July 5, 2021
Thus, DCF GOD highlighted in their posts that Shyu’s wallet had exactly 1 million USDC to 1 million MM, as per his promise to keep the equivalent of $1 million in stablecoin to support the price of his token. However, his address now has about 3 million USDC and 113,000 MM. “He sold Million Token and made $2 million,” accuses the Twitter user.
Token would be “social experiment”, not investment
Shyu recently posted a YouTube video addressing the allegations, denying that he hurt investors by removing MM’s liquidity on Uniswap. However, YouTuber also emphasized that its token “should not be considered an investment”, describing the project as a form of social experiment.
“The Million Token should not be considered an investment in any way. This is a social experiment and pure speculation. It’s kind of a game for us to see what happens to it, similar to dogecoin,” said Shyu.
With information: Cointelegraph