Explained: The GMETA Rug Pull (July 2023)

In July 2023, the creator of GMETA on BNB Chain performed a rug pull. They drained an estimated $2.36 million tokens from the project, causing its value to fall by 96%.

Inside the Rug Pull

The GMETA rug pull was performed by the contract creator. They minted a large number of tokens and sold their holdings, causing the token’s value to crash.

The initial $GMETA mint occurred on February 4, 2023, when the contract creator minted 1 million of the tokens. In July 2023, the contract creator withdrew those minted tokens and swapped 120k of them on PancakeSwap for 2,367,507 USDT tokens, which caused the price crash. After the swap, the stolen USDT has been distributed to many other addresses in small amounts.

Lessons Learned from the Attack

Like many rug pulls, this incident demonstrates the risk of centralizing control with a single party. The GMETA contract creator was able to withdraw a massive number of GMETA tokens and crash the market for them.

Decentralization is key to preventing these types of attacks. Multisignature wallets and decentralized governance schemes can be effective deterrents if designed and implemented securely.