Episode One: Play2Earn Rug Pull Chronicles

Aniekan Fyneface
Posted by 7 Min Read April 20, 2022

Welcome to our first episode of the #Play2Earn Rug Pull Chronicles. We all thought rug pull was so 2021 but surprisingly rogue developers have even incorporated rug pull into play-to-earn.

The Play-to-earn idea is very innovative, allows game players to earn and be compensated for their gaming time. But with every innovation comes its drawback.

See Also: #Play2Earn: Introducing Flying Mononoke 

I have personally been rug pulled by two play-to-earn blockchain gaming projects. We will take a look at these two projects and determine if they hit the end of the road or if it was just malicious intent from the developers.

In this first episode, we will be taking a look at Black Eye Galaxy.

Black Eye Galaxy

This was a space-themed play-to-earn blockchain game with very lovely designed NFTs called asteroid Miners. To play the game, players can either buy planets where resources are mined or purchase an asteroid miner which would enable them to mine resources on a planet.

Black Eye Galaxy rug pull

How did black eye galaxy pull the rug?

1. Fake promises: like every Ponzi scheme you are promised huge returns from your investments. Black Eye Galaxy did this exactly and promised a mouth-watering 600% return in over two months if you buy an asteroid miner NFT (MK1).

Black Eye Galaxy fake 600% apr promises

Cryptocurrency investors began to buy the MK1 asteroid miner due to the fake promises of massive returns on investment. The MK1 cost 1400 BYG tokens and at ATH this is about $560. Investors owned an average of 10 asteroid miners. According to data released by the rogue team, they sold over 4000 asteroid miners to investors.

If 4000 asteroid miners were purchased at a median price of $0.15 that is $840,000. So the team made away with this amount just for the asteroid miners (MK1).

2. Staged hack: at some point in the project the black eye galaxy team staged a hack. This plummeted the price of the BYG token. Rogue devs always need a reason to stop a project, and this staged hack by the black eye galaxy team was a good reason.

After the hack confidence level in the project dropped tremendously and this was reflected in the token price.

3. Discontinue MK1 minting: the team was the first and only source of minting the MK1 asteroid miner, which could later be listed on the marketplace for a higher amount.

But with this monopoly of being able to mint it for 1400 BYG which was lower than what it was listed for by players on the marketplace, the black eye galaxy team made more than $500,000 from investors based on our calculations.

Like every Ponzi scheme more new people need to join for the Ponzi to continue and when the number of asteroid miners minted by old players was too high, the black eye galaxy team had to discontinue MK1 minting. The Ponzi was already at its breaking point with many stuck after the failed promises of making 600% from MK1 in two months.

4. Oracle: the price oracle further ruined the project but I believe this was all thought out by the team to get more people stuck and clear their names in case of a rug pull. We call this kind of rug pull – slow rug.

The black eye galaxy team slowly pulled the rug through the price oracle that kept paying massive amounts of byg tokens to buyers of salvage ship NFTs as the price of the token kept dumping massively. With this, the team had an excuse for the low prices and could be excused if things get ugly.

5. Racing game: the racing game was used as bait to get more players stuck. Developer updates of the racing clips were frequently shown to investors which made many people hold on to their tokens while the team’s main intentions were to get them trapped while they kept selling tokens they amassed through planet sales, asteroid miner, and salvage ship minting.

Fast forward to the war in Ukraine the team came up with excuses that the development team of the racing game was trapped in Ukraine. Formats like this are widely used by rogue developers.

6. Rebrand to Spaceborne: what pains me most is the fact that they knew black eye galaxy was already a failed project but didn’t say it till after they dumped all tokens they had in their possession. A few days before the announcement of the rebrand to Spaceborne they even had an auction for a planet which was announced on Twitter.

Conclusion

Cryptocurrency and Blockchain technology should be devoid of rug pulls. If we allow rogue individuals like the Black Eye Galaxy team to get away with their crime then we are encouraging bad actors in the play-to-earn and blockchain industry at large.

We would like authorities in the jurisdiction where these people reside to investigate them and persecute them if found guilty. We would also strongly advise all play-to-earn players, investors, and enthusiasts to boycott investing in Spaceborne. If you invest in Spaceborne you are encouraging rug pullers.

Considering the points raised, you can see how greedy and deceptive the Black Eye Galaxy team was. These criminals are supposed to get jail time and not be working openly on another play-to-earn project called Spaceborne.

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