In brief
- The price of Axion Network's AXN tokens collapsed on day one.
- The Axion team suggest the price drop may have been caused by an exploit.
- The Axion Network describes itself as a high-interest investment platform.
A suspected exploit has caused the Axion Network’s AXN token’s price to crash by 99% just hours after the token went live.
At the time of writing, 79 billion AXN has been unexpectedly minted and sold. The Axion Network AXN token went live in the early hours of November 2, 2020, before the price crash hours later. The Axion team have said this may be due to an exploit.
“There seems to have been a minting exploit in the contract with regards to staking,” said the Axion Network’s COO in its official Telegram channel, adding that $500,000 has been stolen.
In the interim, the Axion Network team is advising users to steer clear. “Do not buy AXN right now, do not interact with the dashboard,” the spokesperson added.
According to CoinGecko, the AXN price fell instantly from $0.00034079 to $0.00000015, a 99% decrease.
As a result of the news, some AXN holders are criticizing the Axion Network for failing to warn users clearly. “I’m being told I’ve lost all my tokens. This is not fair,” one user said in the official Axion Network Telegram channel.
The Axion Network calls itself a high-interest investment platform. It encourages users to lock their tokens up and claims they will be able to “enjoy life, living off the interest!” However, this isn’t the only red flag.
The AXN token airdrop was initially made to HEX holders at a 1:1 ratio.
Having close ties to the Hex project is a worrying sign. HEX adverts have often used the spurious phrase: “HEX is designed to increase in value faster than anything else in history.” Critics claim there are major warning signs, including that it is not known where users’ funds go.
Further, Andreas Antonopolous, an influential crypto commentator with 519,000 Twitter followers, has claimed he was offered 10 Bitcoin ($134,934) for an interview with the objective to show that HEX was not a scam. He said he was asked not to disclose the financial incentive.
The Axion project also appears to be similar to HEX in its attempts to get reward users for locking up their coins. By decreasing the available supply, this is a tactic designed to boost its price. But since it relies on heavy interest, it requires a constant supply of new investment to fund the earlier investors.
According to the Axion Network website, well-known auditing teams Hacken and Certik have conducted a Smart Contract Code Review and Security Analysis. According to the website, this was to “ensure that our network is tested and secure, thus providing an extremely strong foundation built for longevity.” But even though the token went through five different audits, it didn’t even last five hours.