Twitter users allege Manifold is guilty of prepetrating a classic “pump and dump”
Twitter users have alleged that Manifold is guilty of perpetrating a classic crypto “pump-and-dump” following its latest NFT drop on March 28, which quickly collapsed into a debacle.
Manifold is being accused of dumping thousands of $ASH tokens that were required to buy the NFTs from the artist Pak’s upcoming collection, “Ash Chapter II: Metamorphosis”, when it became clear there were problems with the airdrop.
The NFT drop, to put it mildly, was a total failure that in itself cost users thousands of dollars. While Manifold, one of the best-known minting platforms in the NFT space, has pinned the blame on bots and MetaMask wallet congestion - conveniently avoiding taking any blame itself - many on Twitter have said its own developers are to blame.
They claim that the smart contracts used to facilitate the drop were unaudited and riddled with bugs. As a consequence, thousands of NFT buyers reported failed transactions, meaning they were unable to acquire the NFTs they attempted to purchase. However, they were still charged $ETH gas fees, with some reportedly losing thousands of dollars in the process.
Some users did receive tokens, but even they reported being charged much higher than expected gas fees. Most, however, failed to receive their NFTs.
To its credit, Manifold has conceded that the NFT drop “did not go as planned” and has promised to rectify the problems by issuing a new smart contract, without bugs, so as to deliver the NFTs to buyers as promised. It also promised to refund user’s gas fees, though to date many have complained they haven’t yet received one.
Uncovering what happened with Manifold
In an autopsy of the incident on its website, Manifold said the failed drop was the result of thousands of bots spamming the network, issues with MetaMask’s gas estimation functionality resulting from network congestion, and several buyers apparently altering the gas fee estimation in MetaMask manually.
Twitter users however, responded that Manifold’s excuses were woefully inadequate and that neither the bots nor network congestion would have caused the smart contracts to play up in the way they did. Rather, they say the fault drop was due to bugs in the smart contract that appear to be linked to Manifold’s use of a randomizer to ensure buyers would receive a token at random from Pak’s NFT collection. So, in other words, Manifold is attempting to cover up its own mistakes and unprofessionalism.
While Manifold’s attempt to shift the blame might be looked at as somewhat unprofessional, at best, the real kicker was its alleged behaviour in the immediate aftermath of the drop. Within minutes of the drop, which sold out in less than 10 minutes, certain individuals who could well be associated with Manifold in some way dumped millions of $ASH tokens on exchanges, promptly crashing its price.
Because Manifold compelled customers to buy $ASH tokens to purchase the NFTs, its value had risen from $15.61 to a high of $24.56 in the 24 hours before the drop took place. Then - boom! - dozens of $ASH bag holders dumped their tokens, crashing its price to less than $9 in a matter of minutes, all before news of the failed drop emerged.
Until now, Manifold has made no mention of the $ASH token dump either in its tweets or in its autopsy, despite multiple Twitter users bringing the matter to its attention:
At this stage, it cannot be proven conclusively that Manifold was responsible for the dump. What we do know, however, is that someone or several people immediately sold millions of $ASH within minutes of the Pak NFT drop, before anyone else but Manifold knew of the problems. It’s clear that anyone with prior knowledge of the transaction failures would have had every motivation to want to rid themselves of any $ASH tokens they might be holding.
The consequences of the dump mean that thousands of Manifold’s customers not only failed to receive their NFTs, but are now left holding bags of seriously undervalued tokens. That’s in addition to the hundreds and thousands of dollars lost in gas fees due to the failed transactions.
While some might forgive Manifold for its incompetence over the faulty smart contracts, if it’s also proven that the company or its employees were behind the dump too, it would be a clear-cut case of fraud and insider trading. If that’s the case, then it’s guilty of a criminal, unforgivable act that it cannot be allowed to brush under the carpet, as it appears to be trying to do.
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Image credits: Arthur Mazi and Milad Fakurian.
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