For this reason, Snowdog (SDOG) has lost more than 90% of its value since the repurchase

SnowdogDAO rocked investors over Thanksgiving.

The Avalanche-based OlympusDAO fork plunged more than 90% on Thursday (Nov. 25) after the Protocol’s proposed buyback event resulted in a massive sell-off.

SDOG / USD price chart | Source: CoinMarketCap

Snowdog, calling itself a “decentralized reserve coin meme,” allows users to mint SDOG tokens at a discounted rate by depositing other assets as collateral. It attracts liquidity in the same way as OlympusDAO, the first protocol to use a “liquidity flywheel” model. In recent weeks, due to the growing interest in the protocol, numerous OlympusDAO forks have surfaced on Ethereum and several other blockchains.

OlympusDAO liquidity flywheel | Source: Ryan Watkins

Snowdog differs from other OlympusDAO forks in that it is only supposed to run for eight days. The protocol announced at launch that after eight days it would use all the assets in its coffers to arrange a “big buyback” before converting it to meme coins by dividing each SDOG by a coefficient.

The planned repurchase event led many owners to amass SDOG in anticipation of a significant price increase. However, when the buyback began on Thursday, it collapsed and eventually lost more than 90% of its value.

The drop in prices resulted in many in the Snowdog community accusing developers of pulling the carpet through buybacks to get out of their positions first, leaving other investors trapped as the price fell.

However, others have denied the allegation, stating that the transaction data shows no evidence of foul play.

On Friday morning (November 26th) the Snowdog team announced a detailed investigation report detailing why SDOG crashed. The developers apologized for not making it clear how the buyback could affect the price.

“We wanted to host an event that could grab the attention of the crypto ecosystem and at the same time delight the onlookers on the fringes … Let the SDOG price be above the market price before the buyback (approx. 1,200 USD), sellers have to be part of it be the first 7% of the offer sold. ”

With only 7% of the SDOG offering for profit likely to be sold during the buyback, many owners have been forced to sell below market price or suffer additional losses resulting in a 90% decrease.

The research report also outlines future plans for SDOG and describes how to create long-term value for owners. However, many community members have stated that after the incident they are no longer interested in the project.

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