Fearing a rugpull, OpenSea jumped the gun and pulled the rug itself on DAO Turtles, a sold-out PFP collection of 10,000 pixel art terrapins. The company cited a violation of terms of service as impetus for the move, perhaps due to the DAO’s promise to pay a future percentage of profits to holders. But turtle owners suspect the motivations are more personal. Christ… I can’t believe these are real sentences I get paid to write.
@guy_texan tweeted a timeline of the story. Members of the DAO Turtles Discord had apparently been making memes about the project, which they’d already bought into, being a rugpull. (Because it’s dank? IDK. I’m sadly no longer a Kid These Days.) An employee of OpenSea who owned some of the collection’s NFTs dumped them. Then, soon after, the company announced a freeze on trading DAO Turtles, without explanation. I’m not one for snap judgements, but the whole thing does seem fishy.
We’ve mentioned these scams quite a bit the past week. So what is a rugpull? In short, crypto fraud. Anonymous developers generate hype and capital for a project then take the money and run — or, since virtual cardio has yet to take off, empty their account and log off. (Famous practitioners include BAYC ripoffs and Lil Uzi Vert.)
OpenSea is infamously ill-equipped to protect against scams, with the platform’s ample bugs at times facilitating them. And comments alleging ‘insider trading’ make sense when you consider the OS Head of Product was accused just last month of the same thing. SEC regulation is practically nonexistent in the NFT space, so employees buying drops before they’re even listed — and inevitably promoted out the ass by the company they work for — isn’t actually illegal. It wasn’t even until after the accusations went public that OpenSea instated a policy on this. All in all, a healthy reminder that this space is as dangerous to operate in as it is potentially profitable.
Anyway, DAO Turtles responded by dropping Jail Turtles, a collection of the same turtles now behind pixelated bars that ‘gives tribute to DAO Turtles being oppressed and highlights the issue of OpenSea being completely centralized.’ Civil disobedience has never been lower effort. I guess why bother? Slow and steady still wins the race.