The price of a new cryptocurrency inspired by the hit Netflix series “Squid Game” has skyrocketed 40,000 percent in just its first few days of trading.
The relatively obscure crypto is up more than 200 percent in the past 24 hours and it now commands a market capitalization of more than $419 million.
While the rapid spike in price may be tempting for traders, CoinMarketCap warns on its site that some people appear to not be able to sell the coin once they buy it.
“We have received multiple reports that the users are not able to sell this token in Pancakeswap. Please exercise caution while trading!” CoinMarketCap warns. Pancakeswap is a popular decentralized cryptocurrency exchange.
The issue could be tied to an “anti-dump mechanism” that the creators of the coin describe in a white paper associated with the cryptocurrency.
Like the South Korean “Squid Game” show, in which 456 deeply indebted people compete in deadly children’s games for a grand prize of more than $38 million, the Squid token was launched as a way to buy into the Squid Game project, a crypto play-to-earn platform that will culminate with an online tournament next month.
The online tournament will mimic the six rounds of games featured in the hit series, but, as the white paper says, “we do not provide deadly consequences.”
“Your experience will only reflect on the joy of winning rewards and sorrow of losing money when the game failed,” the white paper says.
Another difference is that the online tournament will not cap the reward money for winning nor will there be a maximum number of players.
However, contestants will have to fork over a preset amount of the SQUID token in order to compete in each round of the tournament. At the crypto’s current price, the fee for the final round of the tournament, for example, stands at roughly $81,000.
Entry fees from each of the rounds are split between developers, who said they’ll take 10 percent, and the reward pool, which will get the remaining 90 percent.
And throughout the tournament, players will have the opportunity to earn non-fungible tokens, or NFTs, by winning rounds. The NFTs also appear to be for sale on the behind the token’s website, and they can be traded among contestants.
The NFTs provide holders with certain gameplay-related perks, like free entry into the next round, the token’s whitepaper says.
NFTs are digital assets that represent ownership of virtual items like computerized art and sports highlights. Transactions of NFTs are recorded on blockchain technology and powered by collections of code known as smart contracts.
Throughout the game, users will also earn Marbles Tokens, which is another reference to the show. Those tokens will allow users to eventually sell their SQUID coins and cash in, according to the white paper.
The new cryptocurrency and the associated online tournament demonstrate some of the innovation happening in the crypto space, where blockchain technology is being used to create interactive games like this one as well as virtual worlds and other digital playgrounds.
But the spike in value of each of the tokens also underscores how ripe the nascent sector is for fraud.