A crypto user accidentally burned 10 million of the newly created PUMP tokens.
These tokens were worth a staggering $75,000 according to market prices and were removed with an automatic wallet cleaner.
This incident shows the importance of caution when it comes to managing crypto holdings.
The PUMP token was recently launched by Pump.fun, and has been a massive success so far, after selling out in just 12 minutes and raising $500 million.
Fortunes can change in mere seconds in the crypto space, for the better or worse.
One such incident happened recently, when a Solana trader accidentally burned 10 million PUMP tokens.
These tokens were worth over $75,000 and were permanently destroyed during a wallet cleanup operation gone wrong.
Here is how it all played out.
The burn occurred when the trader used an automated wallet-cleaning tool designed to remove unwanted airdropped tokens.
These tools are meant to help users get rid of so-called "junk" tokens, or coins that are often sent en masse to wallets in unsolicited airdrops and have little to no real value.
Unfortunately, among the tokens flagged for removal was PUMP, the newly launched memecoin from Pump.fun.
User accidentally burned tokens
These tokens, which initially may have appeared valueless due to their low trading price, had actually gained traction and were worth thousands.
The wallet-cleaning tool, acting on the trader’s command, sent the tokens to a burn address.
And in crypto terms, burning tokens like this permanently removes them from circulation.
Once burned, they're gone forever.
Blockchain transactions are irreversible. This is one of their main features, but also one of their greatest risks.
Once those 10 million PUMP tokens were burned, there was no way to retrieve them.
At the time of the incident, each token was trading for approximately $0.004, making the total value of the destroyed tokens over $75,000.
The entire event, recorded on Solscan via Solana’s Token 2022 program, cost the trader just $0.002243 in transaction fees.
However, the real cost came in the form of lost assets.
There’s some ambiguity surrounding how the trader got the tokens in the first place. Pump.fun had clarified that PUMP tokens would be untradable and untransferable during the initial distribution phase.
This has led some to speculate that the burned tokens may have originated from the controversial Bybit sale, which saw high demand amid massive user dissatisfaction.
Adding to the confusion is the fact that wallet cleaners often categorize low-value or unverified tokens as disposable.
Since PUMP was still in its early distribution phase, it was very likely flagged by the wallet cleaner as “worthless junk”.
While the loss was devastating for the trader involved, some in the community pointed out some upside.
The accidental token burn might be bullish for PUMP holders, because reducing the token’s total supply increases scarcity, which can be great for price.
In theory, fewer tokens in circulation could lead to a price increase for remaining holders.
However, this silver lining doesn’t soften the blow for the trader who burned their holdings.
It does, however, show the need for more caution when managing crypto assets.
The PUMP token was launched on Pump.fun and its ICO was a massive success, selling out in just 12 minutes and raising $500 million.
The maximum supply of the token is set at 1 trillion, distributed 33% for the ICO, 20% for the dev team, 24% for the community and other initiatives and 13% for early investors.
The remaining tokens were allocated for liquidity, the ecosystem as a whole and for live-streamed events
Despite the success of the token sale, controversy quickly followed. Many users reported failed transactions and incomplete orders, even though they placed their bids within seconds of the sale going live.
Failed transactions reported| Source: Twitter
Some were even refunded without explanation, with one user calling out the exchange saying, “You guys got some explaining to do to prove no crime was committed.”
Overall as memecoins like PUMP gain momentum, users must be on high alert.
Because what looks like a worthless airdrop today could turn into a small fortune tomorrow.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.