WazirX has announced compensation for users who have lost money as a result of the 'Doge Killer' trading frenzy.
WazirX, an Indian cryptocurrency exchange has announced measures to reimburse users who bought the meme currency Shiba Inu (SHIB) after it was listed on the exchange on May 13 at a price higher than its actual value.
On the same day, Vitalik Buterin, the Ethereum blockchain's founder, donated 500 Ether and over 50 trillion SHIB, which was worth approximately $1.14 billion at the time of the transaction, to India's COVID-Crypto Relief Fund, which was founded by Indian tech entrepreneur Sandeep Nailwal.
Within an hour of its listing, the meme cryptocurrency token dropped below Rs 1. According to reports, the price of SHIB at the time of listing was $0.00002, which translated to approximately Rs 0.0016. WazirX, on the other hand, had the price listed at Rs 3. Many users complained about the price difference after they had purchased the meme currency, also known as the "Doge killer," in haste and without verifying the actual listed price.
"The SHIB market's deposits and withdrawals took longer to go online due to a misconfiguration. There was also a delay in our liquidity provider bringing in more liquidity, resulting in a liquidity shortage in the SHIB market. Due to a lack of liquidity, SHIB prices rose as more people traded" WazirX elaborated in a blog post.
"Our team quickly discovered this misconfiguration, enabled SHIB deposits and withdrawals, and the SHIB price was automatically adjusted based on new deposits coming in from our customers," the statement continued.
Following the fiasco, Nischal Shetty, the Founder and CEO of WazirX India, announced the WRX Airdrop programme for those "who purchased SHIB at an extraordinarily high price and did not sell." He said that the company would 'AIRDROP WRX' an amount equal to the users' losses.
Over the next four months, such users will receive WazirX utility tokens. Each month for the next four months, the company would 'airdrop' tokens equal to 25% of the loss incurred. "We'll be using WRX obtained as part of trading fees. There will be no WRXs that have been specially unlocked or used for this airdrop programme "Shetty continued.
Several people are hopping on the crypto bandwagon as the country's crypto craze grows. SHIB, the self-proclaimed "dogecoin killer," was founded in August 2020 by Ryoshi. It is modelled after Dogecoin and has a market capitalisation of over Rs 457 billion at the time of writing this report, according to Coinbase.