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Lucian Borta is a Romanian entrepreneur based in Reading / Great Britain and one of the thousands of Romanians who were interested in a new cryptocurrency launched on the Elrond Network platform.
Lucian is a member of the Elrond Romania community and wanted to take advantage of the cryptocurrency from the beginning , hoping that if he buys as much as possible and as soon as possible immediately after the launch, he will later make a profit. It wasn't like that. On the contrary.
24 hours before the listing of , Lucian Borta transferred to his account of Maiar (the virtual wallet offered by Elrond Network), the amount of 23,000 dollars, in EGLD, the flagship currency of Elrond Network. was known before listing that it could only be purchased with EGLD , which ranged in value from 243 to $ 341 24 hours before listing, according to Coingecko.
"Within 15 minutes of launch, the $ 23,000 was still worth about $ 4,700. At the same time, we invested another $ 15,000 (also from the account, not crypto gains) to offset the loss! As a result, today the $ 38,000 is worth $ 22,000! ”, Lucian Borta
He says he is aware of the risk he has taken and has nothing to blame. "It simply came to our notice then. I don't blame anyone, moreover, I see an opportunity in the Elrond, MEX & RIDE projects! ”, Says Lucian Borta.
However, the young entrepreneur is one of the few who has such an attitude. Hundreds, maybe thousands of people - many Romanians - have complained in recent days in the virtual environment, especially in Facebook or Telegram groups related to the Elrond community, that they have been the victims of a price manipulation as a result of which they lost large sums of money.
Elrond CEO Lucian Mincu acknowledged that during the launch, were used - software applications - which automatically bought at a low price and sold at a much higher price, which destabilized the price to the detriment of ordinary buyers.
One thing is certain: after listing, most of those who bought lost, while few, very few, earned millions of dollars.
How to artificially increase the price of a cryptocurrency
Let's first understand what it means to list a virtual currency.
The virtual currency launched on Thursday is called and is part of a project run by a German start-up that wants to use the metaverse to improve the passenger experience. , therefore, is not a "Romanian" cryptocurrency - the geographical location being irrelevant in the case of these types of values ??- but a "German" one.
was listed on the Elrond blockchain in a recently opened decentralized exchange, the Maiar Exchange. In the field of crypto, these virtual "exchange houses" are called DEXs, ie online platforms where transactions are made directly between users, in a decentralized way, based on predefined algorithms called smart contracts.
The interest in the new cryptocurrency has been enormous. In the first seconds, cost a few cents. A huge purchase was made when the coin cost the equivalent of $ 0.155. Then an account, using a , bought 10.79 million Rides.
The payment was made with 5,600 EGLDs and cost the equivalent of approximately $ 1.6 million.
In parallel with the purchase of 10.79 million Rides made by a , another computer application, belonging to another wallet - so another , made a similar purchase. The wallet belonged to a staking agency, which bought 6.9 million for $ 0.43 (the EGLD equivalent). In the field of crypto, is the temporary blocking of a cryptocurrency, to help a blockchain and receive, in return, rewards.
The two huge transactions have significantly increased the price of and overlapped with the interest of simple users, with a few hundred, thousands or tens of thousands of dollars to invest, which in turn were trying to buy.
Some of them later complained that the Elrond platform did not work and that they placed the purchase (swap, in specialized terms) at a price, but this was executed at a much higher price.
Most of the users who tried to buy from their computer or phone without the help of an application ended up buying for 3-4-5 or even $ 7.
When the price went up to these values, the two wallets with huge purchases sold and made fabulous profits. For example, the wallet through which 10.79 million Rides had been bought for 5,600 EGLDs also sold for 119,000 EGLDs. Profit: $ 34 million, taking into account an average price of $ 300 at the time of sale. It should be noted that EGLD, being a stable cryptocurrency with a much higher capitalization ($ 5 billion), had a low volatility compared to the price not being too much influenced during the listing.
On Sunday, December 19, an EGDL cost about $ 250, so if the wallet had been sold yesterday, it would have made a profit of $ 30 million.
The EGLD has cost more than $ 500 in the past, so if it reached a similar value and the anonymous one has not sold yet, it could mean a profit of $ 60 million. Everything in just a few seconds.
However, the representatives of Elrond Network say that they have identified who that wallet belongs to and that they had discussions with the owner.
"After several rounds of talks, we were able to reach a conclusion: 40.7k EGLD and 1.1 million RIDE will be returned to the community."
In the field of crypto, what happened at the launch of is called "Pump and dump". That is, a massive purchase, followed by a sale of the same magnitude. The losers are usually the many who invest less in the crypto market, but who can be huge for them.
Elrond's answer
But how legal is it, what happened on Thursday on the Maiar Exchange?
"The use of scripts and automation is a very common practice in the industry. Blockchain networks are accessible to anyone and smart contracts respond to any request that meets the execution parameters, whether this request was initiated by a user using a graphical interface or a 'bot'. By its very nature, Maiar DEX could not block this type of interaction. "
About the accusation of some users that they wanted to buy at one price and ended up doing it at another, higher, Elrond representatives explain the notion of "slippage", ie a tolerance of the buyer to accept a price change.
"Its default value on the platform is 1% and can be configured by buttons at 0.1%, 0.5% and 1%, or manually in the range 0 - 50%. Once the user decides to accept the quoted exchange price and eventually set up his% slippage, he confirms the transaction, which is then sent to the Maiar DEX smart contracts, where they are executed in the order in which they are received. In high load conditions, where tens of thousands of users send transactions simultaneously, these transactions may be processed in up to 10 minutes, or may not be executed at all, if the waiting time exceeds 10 minutes ( timeout). The price at which the transaction is executed is that from the moment it is processed. "
Elrond's solutions
Benjamin Mincu, CEO of Elrond, says listing Maide Dex's Ride was "a painful and instructive lesson."
