$18 100 000 USD
DESCRIPTION OF EVENTS
"The story of Snowdog begins on November 14th, 2021, when a cute puppy icon was shared by the Twitter account of SnowbankDAO, a fork of Olympus DAO conceived on the Avalanche Network. The adorable face was accompanied by the cryptic question, “Are you ready to play a little game?”"
"SnowDogDAO ($SDOG) was an Avalanche-based fork of Olympus DAO, a project which aims to become the reserve currency of the crypto space." "As it turned out, thousands of Avalanche users were ready to play a little game, and in just eight days the Snowdog project raised over US$ 45 million, a historical record for DeFi. Everything was going well for Snowdog, or so it seemed."
"However, SnowDog’s mission, unlike other Olympus forks, claimed to be different from the start, as it was gearing towards become the first meme token on the Avalanche Network, instead of a reserve currency." "The Snowdog website laid out a simple eight-day roadmap. During the first five days, users could mint Snowdog tokens (SDOG) in exchange for a variety of assets, then stake their SDOG to earn yield to the tune of “the largest number you have ever seen in your life”."
"Day 1 - 11/17 3PM EST. Minting is available for 5 days. You can accumulate $SDOG by minting, staking, or buying from the market. Staking APY will be the largest number you have ever seen in your life. Minting vesting term is 3 days (versus 5 days usually)."
"Day 5 - 11/22 3PM EST. No more $SDOG can be minted. $SDOG not yet redeemed can still be redeemed. Staking remains unchanged."
"Day 8 - 11/25 3PM EST. All assets from the Treasury (except the SDOG-MIM LP) are swapped for MIM. At a random time of day 8, all the MIM is spent to orchestrate a massive buyback of $SDOG from the SDOG-MIM liquidity pool. $SDOG bought will be burnt. Staking rewards will be paused (you will always be able to unstake your $SDOG). All the contracts' ownership will be renounced. $SDOG will have a fixed supply and will become the meme currency of AVAX."
"After five days, minting ceased and for the final three days, users were able only to stake. On day eight, all funds in the Snowdog treasury were to be used to orchestrate one large buyback from the open market. Anticipation grew strong for the imminent “god candle”, that would surely result from US$ ~45 million entering an illiquid pool, and spurred on by the Snowdog twitter account posting images of the size of the Treasury funds for the buyback and repeated messages about being ready to “play a game”."
"The finale was an unfortunate and unparalleled failure (that is, excluding premeditated hacks and code exploits). On day eight (the date marking USA Thanksgiving), something changed. The liquidity was pulled from the Number 1 DEX on Avalanche (the highly reputable and well regarded Trader Joe) and moved to a private AMM pool controlled by Snowbank. The assets in the pool (SDOG to MIM) were proportioned as if the buyback had already occurred. Players were glued to their PCs/laptops in confusion and excitement."
"When the Snowbank AMM was finally opened to the public, it was revealed that slippage was locked at 99%. Any attempt to sell carried the risk of losing 99% of value. Players had only microseconds to weigh this risk and make a decision, as the market price of SDOG plummeted 95% over the course of ~30 seconds from the open."
"Sadly, the average user had little shot at exiting in profit. In fact, only three wallets managed to sell above the expected buyback valuation (one wallet sold 139 SDOG for over US$ 10 million). Theories arose as to how the first three wallets managed to extract the lion’s share of value, many suggesting foul play, and the Snowdog community turned to the founding members of Snowbank for truth and compensation."
"Account is 1 day old. Funded with $ETH from @FTX_Official. Bridged to #Avalanche. Swapped $WETH.e for $189K in $MIM. TWAP'd into $SDOG in $10K buys day before the "buyback". First address to sell into the LP for ~1/4 of the "buy back power"."
"When $SDOG holders eventually were finally able to log into the password protected AMM, they were met with a sharp dump. Two whale wallets had already surpassed everyone, with one selling 187 $SDOG for $10 million dollars, or $54,000 a token."
"While most $SDOG holders expected that they were not going to be the first to sell their $SDOG tokens, true frustration came later, when the community realised that the wallets that dumped their tokens were able to do so before the AMM’s password protection was lifted."
"Furthermore, these wallet addresses had never before approved the $SDOG contract on Trader Joe, which one would expect them to do if they had no prior insider information. All these pointed to the likely scenario that the SnowDog team had rugged the project."
"Ex-post comments and actions of Snowbank were unsatisfactory to the Snowdog token holders, as Snowbank proceeded to renounce ownership of Snowdog (as they had premeditated), this in spite of their collective failure in executing as advertised, leaving the future of Snowdog in the hands of its investors. Snowbank’s only remedial words on Snowdog included the promise to hand over all assets, including social media accounts, Discord server, SDOG tokens and SDOG-MIM LP tokens over to the SDOG community, unconditionally."
"Down 99% with nothing to lose, the abandoned community pooled their brains and skill sets to build a new DAO from the ground up, the Snowdog DAO, a DAO that’s aligned with its core values - transparency, community and memedom."
"United as one, the new Snowdog DAO empowers investors to directly vote on protocols, leadership roles, treasury spending, and more. As a final test of Snowbank’s management’s integrity and purported desire to remediate their collective failures, the newly formed Snowdog DAO will be voting on the course of action pertaining to said assets through community governance today (starting 12:25 UTC 03 December 2021), as detailed in its first DAO proposal: view here, and it seeks full compliance by Snowbank’s management to the outcome of the Snowdog community vote."
"The new SDOG DAO requests that SnowBank DAO transfer ALL financial interests, relationships and token assets raised, controlled, and otherwise owned by the original SDOG DAO at the time of SnowBanks’ abandonment of the original SDOG DAO, that it is currently holding for safekeeping to the following multi-signature address owned by new SDOG DAO: 0xcFa8196852Cc36A8f46B7DDe957a11aD5149542f"
"The signers of the multi-signature contract take on the fiduciary responsibility to safeguard these assets and only use them at the direction of future votes by the community, whatever it may decide. Additionally, if the signers of the multi-signature wallet unanimously agree, they may spend minimal treasury assets on reasonable and necessary expenses to facilitate this transition and the establishment of the new SDOG DAO and the safeguarding of its assets. A public announcement will be made in the public and official Discord server of the new SDOG DAO of any transactions along with their justification at least 24 hours prior to their execution."
"The undersigned SDOG token holders voting yes endorse this plan and request SnowBank DAO and the original SDOG DAO transfer all token, assets, and funds held on behalf of the original SDOG DAO to the above multi-signature address for the future benefit of the SDOG DAO token holders."
The SnowDog DAO was a new token with a ridiculously high APY, which was managed by an anonymous team. The ability to sell the tokens was opened up on a smaller liquidity platform, which wasn't expected by the community, and this was initially password-protected. When the password was removed, it was discovered that many of the tokens had already been sold, and everyone else faced a loss. The tokens were transfered over to the community in a community-run DAO. The community voted to issue a new SD2 token 1:1 to the existing SnowDog token holders. It is unknown whether anything will come of the new DAO to assist participants to recover what was lost.
HOW COULD THIS HAVE BEEN PREVENTED?
Having an anonymous team behind the token allowed for no accountability, and this was obviously not a fair liquid market. All projects are subject to approval from 2 expert reviewers under our proposed framework, which would likely prevent a similar situation. If not, the known team would be held to account.
Rekt - Snowdog - REKT (Jan 3)
Snowdog DAO (Jan 4)
SnowDog ($SDOG): How I May Have Been Part Of A Rugpull (Jan 4)
@SnowdogDAO Twitter (Jan 4)
@DastardlyDaniel Twitter (Jan 4)
@DastardlyDaniel Twitter (Jan 4)
SnowDog DAO - What kind of APY is this? - YouTube (Jan 4)
On The Path To Recovery Snowdog Daos First Proposal (Jan 4)
Snapshot (Jan 4)
Snapshot (Jan 4)