After 1 week of rapid growth culminating in over 900 ethereum being invested, Snowdividends was struck by a snowstorm, wiping out nearly 2/3 of the invested ethereum and resulting in the current pot of 343 ethereum. So what caused the mass sell-off of Snow tokens?
Earlier today, SnowDividends released Snowstorm – their version of the hugely popular and lucrative FOMO3D POWH game. One of the core values of the blockchain in addition to decentralisation is transparency. This means anyone can use “BlockExplorers” (Essentially a blockchain search engine) such as Etherscan, to trawl the ethereum blockchain and identify contracts used in Snowstorm and other POWH games. Upon identifying the contracts, it is then possible to use those contracts and buy into these games before the contract is officially released – also known as “sniping.” As these POWH games are based on a pyramid scheme to generate dividends to players, the earlier you can buy tokens, the more dividends you will generate. As a result, snipers are essentially able to cheat the system and obtain an unfair advantage over other players by buying tokens before others can.
Sniping has been rampant throughout the release of these POWH games and unfortunately Snowstorm was no exception. To counter this phenomenon, the developers produced 3 contracts, so snipers would not know which contract would be used. Prior to release, developers realised the contract they were planning to use had indeed been “sniped,” so they decided to link the un-released Snowstorm webpage “front-end” to an alternative contract. Unfortunately, other users had found the link to the front-end and had started distributing it online before it was linked to the alternate contract. Those who clicked on the link had the details of the webpage and old contract saved in their cache. When the developers made the announcement and officially released Snowstorm, those who had previously pressed the link had the original contract loaded from their cache and bought into the incorrect contract as a result.
Ethereum from the snipers and those who pursued the front-end prior to the official release found their ethereum (supposedly in the hundreds) locked away in the unused, original contract. Due to the very nature of blockchain smart contracts, the ethereum locked away is unable to be returned to the investors.
Naturally, there was a huge outcry from those who tried to cheat the system, as well as from those who pressed the link prior to the official release – and were unfortunately burned in the crossfire. As a result, FUD and complaints of Snowdividends being a scam spread rapidly resulting in the mass sell-off of Snow tokens.
This is the statement released by the head developer:
“Because many people are greedy, they scan already the network for contracts in order to "snipe" them (buy before official announcement). We announced multiple times to only listen to our #announcements because every other information is simply wrong. We deployed 3 contracts. Only one was the real one. After activation of the first contract people bought heavily in before our official announcement. If you were already on the website because of leaks or whatever. You've just been on the domain, not on the real server. Everyone who clicked on the link in the announcements after Winter announced it bought into the right contract. If you didn't and say you bought into the wrong contract, its a lie because the frontend was never connected to the contract were people bought in. Its hilarious that you guys try to fud now because you were too greedy and just got into a wrong contract that we never announced anywhere. As you can see above the announcement also wasn't edited at any time. I wrote multiple times into the general chat (and even pinned it) to wait for official announcement messages because everything else is wrong”
The aftermath:
The amount of ethereum invested into SnowDividends appears to have stabilised in the 300s, although continues to dwindle slowly as investors lose confidence. Due to the 20% tax on the buying and selling of tokens however, those who have HODL’d and continue to HODL actually BENEFIT from this massive movement of tokens while the SnowDividends market recovers. Fortunately, I was working throughout the entirety of this saga so I was unable to panic sell even if I wanted to – and as a result, I was pleasantly surprised to have literally doubled my dividends, which was enough to cover my initial investment into the Snow tokens.
Everyone’s situation is different and everyone needs to make the hard choice whether to believe in the project and HODL on or cut their losses and sell. I personally will continue to HODL for the following reasons. Firstly, it is VERY expensive to sell and later rebuy the snow tokens as you will be copping a total of 40% tax. Even if you are just looking to sell, the 20% tax in combination with the price difference between buying and selling tokens is massive. Secondly, your Snow tokens will continue to generate dividends. The more who sell tokens, the more dividends you will generate from these transactions AND the amount of Snow you hold will subsequently make up a larger proportion of the total Snow in distribution. This means earning more dividends for future transactions. Finally, and most importantly, I personally believe SnowDividends will recover - the amount of ethereum invested already appears to be stabilising. This project is in its infancy and small bumps in the road is to be expected. The head developer was genuinely concerned about those who were caught in the crossfire and is working hard to find ways of preventing this happening again in the future. Weekly dividends as well as a completely new game - unique to SnowDividends - is also being developed to continue generating interest and dividends to investors.
Overall, the potential of SnowDividends has been demonstrated by reaching over 900 ethereum invested within 1 week. Snowdividends has recovered several times from significant sell-offs and I feel this will be no different. Right now is a great time to obtain massively discounted Snow tokens and move up the pyramid before everything inevitably snowballs again! Feel free to check out the following link for tokens:
https://SnowDividends.com/exchange.html?masternode=0x037a3079e857e383454fefbea892fde12a2e83fd
Link to the main page without a refereral, where you can join the discord:
https://snowdividends.com/
Link to the Snowdividends reddit:
https://www.reddit.com/message/inbox
TLDR:
Snipers forced developers to change their intended smart contract. The link to the front-end was leaked before the alternate smart contract could be linked to the front-end. As a result, the old smart contract was stored in the cache of those who accessed the front-end early, causing those users and snipers to deposit and lock away their ethereum in an unused contract. Ensuing FUD of a scam caused a large sell-off of snow tokens. The amount of Ethereum invested appears to be stabilising within ~300 (1/3 of the peak). I will personally be HODLing to continue generating greater dividends from the rapid movement of snow tokens as I feel SnowDividends will recover. Now is a great time to pick up discounted Snow tokens to maximise profits before Snowdividends takes off in the future.
NOTE: This is not an official statement by the developers, but my personal interpretation of information I obtained from their discord channel while I was trying to work out what had happened. Nor is this financial advice. As always, I strongly recommend doing your own research, and waiting for an official announcement from the developers.