The launch of PENGU, a Solana-based memecoin linked to the Pudgy Penguins NFT collection, created a storm of activity this week with some traders making huge profits.
The token reached a fully diluted market cap of over $3.5 billion in just two hours following its launch today and generated $290 million in trading volume.
But not every investor has been able to capitalize on this. On-chain data reveals that one unfortunate investor saw $10,000 plummet to less than $5 in just seconds due to a costly misstep involving low liquidity and price inflation.
Approximately five minutes before PENGU officially launched, a trader attempted to swap 45 Solana (wSOL) for PENGU tokens via Jupiter, a popular decentralized exchange (DEX) aggregator. Instead of capturing a suitable price, the swap was redirected to an unofficial liquidity pool on Raydium, resulting in the trader only receiving 78 PENGU tokens, currently valued at less than $3.
The error occurred because PENGU’s liquidity pool was still at a minimum at the time, resulting in an artificially inflated market cap of $14 trillion. DEXs like Raydium use a bonding curve pricing mechanism where token prices rise sharply as liquidity remains low and demand increases. This mechanism, combined with slippage, made the investor’s transaction price much higher than expected.
The trader, likely hoping to “grab” the PENGU token early, spotted the contract address before launch. These snipers, who typically use automated bots, aim to buy tokens at the lowest price immediately following an airdrop. But in this case, the strategy backfired spectacularly.
“Somehow some of the tokens were leaked to other wallets,” said crea, a pseudonymous trader familiar with the memecoin market. “Someone created a liquidity pool early on and trading started with that.”
Crea suggested that the unlucky trader was likely not using a bot, but instead assumed the token was released early, skipping important checks such as verifying market value.
*This is not investment advice.
