ROSS ULBRICHT LOST $12M ON PUMPFUN…
Ross Ulbricht, or somebody with entry to his wallets, simply unintentionally nuked the worth of a pumpfun coin despatched to him whereas making an attempt to supply liquidity on Raydium.
Because he initialized the liquidity pool on the unsuitable value, $1.5M of the… pic.twitter.com/kN5BN2mN49
— Arkham (@arkham) January 30, 2025
How It Happened: A Costly Liquidity Mistake
Ulbricht’s donation tackle lately acquired 50% of the whole provide of ROSS, a token named after him. Instead of promoting off the tokens manually, he tried so as to add liquidity on Raydium to facilitate passive gross sales.
However, he arrange the pool incorrectly, utilizing a Constant-Product Market Maker (CPMM) as an alternative of a Concentrated Liquidity Market Maker (CLMM). This mistake allowed a Maximal Extractable Value (MEV) bot to instantly drain $1.5 million price of tokens from the liquidity pool.
After the primary incident, he repeated the error, leading to a further $10.5 million loss, a mixed complete of 40% of the token provide.
Price Crash and Aftermath
- The MEV bot bought the tokens for over $600K, inflicting the ROSS token value to crash by 90%.
- Despite the losses, Ulbricht’s tackle nonetheless holds 10% of the whole provide, now valued at round $200K.
- The remaining liquidity is now accurately positioned in a Raydium CLMM pool.
This occasion highlights the dangers of dealing with giant crypto allocations with out exact liquidity administration, particularly in an setting the place automated buying and selling bots rapidly exploit errors.
