CryptoMines Reinvents the Rug Pull
At its height, CryptoMines' token, ETERNAL, had a market cap of almost $3 billion, but now it's worth $13 million.
The CryptoMines economy collapsed last week. At its height, CryptoMines' token, ETERNAL, had a market cap of almost $3 billion, but now it's worth $13 million.
CryptoMines is a science-fiction NFT play-to-earn metaverse game on Binance Smart Chain where players mine the metaverse's token, ETERNAL, through gameplay. The game was a hit, with almost 225,000 active users per day in late November. It was the most popular game on Binance Smart Chain, and almost 10x more popular than the second most popular game, MOBOX: NFT Farmer. Over the last 24 hours, CryptoMines had just 1,400 active users.
Exactly what killed CryptoMines remains up for debate, but the two main components appear to be poorly designed NFT economics, and concern about the developers' large stash of ETERNAL.
The FUD about the developers' large reserves of ETERNAL tokens started a couple weeks ago. The devs promised not to dump, but they weren't bound to hold. According to smart contract audits following ETERNAL's collapse, the developers are not believed to have rug pulled. The CryptoMines economy simply collapsed.
The CryptoMines team believe their game was killed by bad actors exploiting the game's poorly designed NFT economics. The dev team explains, "the main problem is that NFTs have no additional cost or wear and tear causing an overpopulation of these assets and thus reaching a point where some investors do not have the need to continue re-investing."
The CryptoMines economy's crash was so bad that CryptoMines went from 1.2 million rewards minted per day to 50,000 minted per day. There wasn't enough money coming into the game anymore to sustain its play-to-earn economy. Now, the CryptoMines team believes it can solve this issue with a new economic model that burns NFTs over time:
"The only way to ensure the long term sustainability of CryptoMines is to do an entire rework, achieving an economy from 0 with degradable NFTs that need constant reinvestment in order to keep generating assets. This way, if an NFT is created it will not continue to cause negative effects on the economy months later."
So it's not a classic rug pull, but the token did fall from $800 to $3 over a couple weeks. The CryptoMines team has a plan for a new metaverse in 2022, and current ETERNAL will be exchangeable for the new metaverse's currency, with some restrictions. CryptoMines will introduce higher fees throughout most of the new version of the metaverse, and they intend to vest the developers' portion of the new currency over 5 years.