Shiba Inu, Kokoswap, Ethereum Meta are a few examples of tokens with wild swings, but their rallies were merely limited to thousands of per cent. ARC Governance (ARCX), however, gained millions of percentage, and that too in just a few minutes. The token has soared an eye-popping 28,54,000 per cent in the last 24 hours. The price of this token has hit $991.71 from merely $0.35 in 24 hours, according to the data from Coinmarketcap.com.
Based on this calculation, the currency would have turned an investment of Rs 1,000 into a mind-boggling Rs 28.54 crore in this period. However, the token lost more than 90 per cent of its value to trade at $928.18 at 12.45 pm IST. Despite this recent fall, the token can boast of gains of 2,60,000 per cent, the data suggested.
At its peak, the token was commanding a market cap of $99 billion, with its volume rising about 2,000 per cent to Rs $2,27,500 in the period. The supply of this token is capped at 100,000,000, and the total supply is 15,393,262. The tokens in circulation could not be ascertained.
“ARCX looks good on paper, but there is low trading volume on the exchange SushiSwap, which accounts for 90 per cent of its volume, and we are seeing few trades every hour,” says Hitesh Malviya, founder, itsblockchain.com. “It’s quite possible that someone manipulated the order book by buying these tokens at a much higher price, and that’s what is reflected on 24-hour gains right now. In short, it’s a pump-and-dump price action.”
Other analysts do not think the prices of ARC Governance are sustainable at current prices, thus raising suspicion of a scam. They are anticipating wild moves in the token.
As a decentralised scoring protocol, ARCX strengthens its on-chain identity by issuing a DeFi passport that carries an on-chain score, says Sharat Chandra, a Blockchain & Emerging Tech Evangelist. “These scores give a fair picture of on-chain activity and aid in underwriting collateralised loans on DeFi platforms. On-chain identity is central to decentralised finance lending activities and has a potential to spread across DeFi settlements,” he says.
ARCX is a token operating on the Ethereum platform. This project was released in mid-2021. The core function of the token is to be a governance mechanism for the ARCX protocol itself. The token aligns incentives between various stakeholders within the ecosystem to promote sustainable growth and fair governance. It currently allows token holders to vote on expenditure from the treasury. In the future, ARCX token holders will be able to vote to receive cash flows generated from the network and participate in native on-chain governance to upgrade the protocol itself.
Raj A Kapoor, founder, India Blockchain Alliance, has raised a red flag that some of the details about the project team are missing. “We expect a level of transparency and professionalism from a project that is asking for our money,” he adds, advising investors to keep away from such tokens.
Experts say liquidity was pumped up, leading to a sharp volatility in the token’s price, which is a normal phenomenon in the cryptoverse.
Manav Bajaj, founder, Panther Quant, calls it another scam where more than 95 per cent of the liquidity was pumped in by the developers. “Currently, liquidity is just 12 ether compared to 255 ether in September 2021,” he adds.