Goat’s wealth effect has once again ignited the Meme track. On the evening of October 23rd to the early morning of October 24th, a project called Shar experienced a dramatic scene in just 8 hours, with a market value reaching nearly $60 million and then plummeting by 96% in five minutes. The reason behind this outcome was that a wallet address sold 500 million SHAR tokens (50% of the total supply) all at once. According to Lookonchain’s detection, this transaction came from an insider trader who consolidated SHAR tokens from over 100 wallets into one wallet and then sold them at 5 am on the 24th.
How did this project attract community attention and achieve a market value of $60 million in such a short time? The investigation found that the Shar project relied mainly on riding on the endorsement of well-known institutions and finding influential KOLs to promote it, thus gaining trust.
After the sell-off, the project team claimed that they did not have enough funds to continue the project due to the FUD (fear, uncertainty, and doubt) they encountered.
The biggest whale of SHAR earned 13,910 SOL tokens.
The development of the situation was too rapid. Within just 8 hours, the Shar project experienced a dramatic rise in market value to $60 million and then fell to $3 million. The SHAR token was deployed on October 23, 2024, at 22:00. In the following hour, the token’s price reached a peak of nearly $0.06, with a market value of nearly $60 million. By around 5 am on October 24th, the token price plummeted from around $0.035 to around $0.0018. According to Lookonchain’s monitoring, the cause of this result was an insider trader who sold 500 million SHAR tokens (50% of the total supply) at a price of 19,620 SOL tokens ($3.38 million).
According to the disclosed transaction details, the insider trader bought a total of 5,710 SOL tokens to acquire 665.6 million SHAR tokens (66.56% of the total supply) through 16 wallets and distributed them to over 100 wallets. Then, in the early morning of the 24th, they collected 500 million SHAR tokens from 104 wallets and sold them all at once, earning 13,910 SOL tokens.
The series of actions of distributing tokens to multiple wallets and then consolidating them is undoubtedly aimed at concealing the trace of their on-chain operations.
It is difficult to accurately determine whether the wallet address conducting these operations belongs to the project team. However, the fact that they were able to buy over half of the token supply with 5,710 SOL tokens suggests that they are the largest whale and most likely the project team.
After the incident, the project team responded on X that they did not have enough funds to continue the project due to the FUD they encountered. In the chat records provided by KOL @0xSunNF, who helped with the promotion, the project team members they communicated with stated that the project’s life was ended by the tweets from the whistleblower. Currently, the project’s partners and exchanges are looking to cancel their cooperation with Shar. The project team is researching refund plans, but there is no news yet.
The Waterloo of KOLs
The promotional materials of the Shar project stated that several well-known KOLs would support the project. However, some KOLs came out one after another after the incident, stating that they had terminated their cooperation with Shar, and some claimed that they had never collaborated with the project.
In fact, many people did buy the token based on the promotion by these KOLs. KOL @0xSunNFT, who has over 100,000 X followers, stated that he had collaborated with the project team. He had posted two tweets to help promote the Shar project, which have now been deleted.
After the incident, @0xSunNFT stated on X that he had not sold the tokens received from the project team and had also used his own money to purchase the tokens.
@0xSunNFT stated in the community after the incident that he had never met the project team in person. He saw the project team setting up a booth at TOKEN2049 this year in a video and saw them collaborating with market maker CSL on clothing. Based on this judgment, he believed that the project team was trustworthy and accepted their advertisement.
He had previously stated on X that he received the project team’s promotion fee in the form of one SHAR token. He received one million SHAR tokens as compensation from the project team. He also purchased 100 SOL worth of SHAR tokens. (Currently, based on the address disclosed by @0xSunNFT, records only show two purchases of SHAR tokens with 100 SOL. The receipt of one million SHAR tokens as compensation has not been confirmed, and it is highly probable that the compensation has not been transferred to his public account.)
One million SHAR tokens were worth about $60,000 at their peak and are currently worth approximately $2,000.
Someone familiar with KOL project promotion in the incubation industry stated that it is a common practice for projects to find KOLs for promotion. Sometimes, KOLs will also join forces to manipulate a project.
CSL also distanced itself from Shar after the incident and stated that they had never collaborated with Shar, including the false claim made by Shar in their promotional PPT about their cooperation with DWF.
The reason CSL paid attention to Shar’s tweets was that Shar attended CSL’s event, which is why they followed their tweets.
Based on the content posted on Shar’s official X account, it can be seen that they started posting messages before Token2049 held in Singapore in September this year. They attended the Token2049 event and collaborated with a project called @CryptoFightWeek. Shar’s project poster appeared at a boxing match they hosted.
However, buying tickets to attend Token2049 does not provide any endorsement for this project.
False advertising, riding on the reputation of well-known institutions, and paying KOLs to promote the project are not costly. If the compensation to KOLs for promotion, as stated by @0xSunNFT, is in the form of SHAR tokens, then it is essentially worthless to the project team.
Currently, some victims in China have reported the incident to the police.
Summary
After the incident, some KOLs came out to state that they had not collaborated with Shar, while Shar’s official X account stated that they had communicated with the mentioned KOLs and although they did not reach agreements with everyone, they did receive their quotes. It can be seen that KOLs receiving payment for promoting projects is a very common practice.
Currently, investors often follow the recommendations of KOLs, especially for Meme Coins driven by emotions and hot topics. The involvement of KOLs can quickly spread the project within the community. KOLs not only receive benefits for promoting the project but also gain insider information to profit from buying and selling.
It is not uncommon for projects promoted by KOLs to exit scam, cutting losses for investors. They simply change their name and continue promoting and exploiting investors. And investors, like goldfish, only have a seven-second memory.
