Introduction

Balloonsville was an NFT project which was launched on February 5, 2022, on Solana-based NFT market Magic Eden.

The project was successful in drawing attention and attracting purchasers. While the volume of transactions as well as price was growing, and the project looked promising, the official Twitter account of the project published a post admitting that the project is a rug pull. The price immediately crushed to nearly 0.01 SOL.

In cryptocurrency, rug pulled projects are, in most cases, promising projects that attract a lot of attention. "When liquidity flows into [such] projects and the price grows, developers then pull all the liquidity they can, crushing the capital of those left holding the bags in the end.".

This is exactly what happened to Balloonsville.

This shameless rug pull not only hurt many users and vanished their assets but also severely damaged Magic Eden as well as Solana's reputation.

Soon after, a team formed and attempted to 'derug' the project. The Balloonsville 2.0 resumed the project with 5000 SOL funds to:

1- refund up to 5000 NFTs

2- continue development of the project.

The newly formed team (DAO) was successful as the price went up again and the volume of transactions became substantial.

As can be seen from the graph below, the price sharply decreased from day one to day two. Then, it went up the day after, following forming the rescue team, and continued the upward trend.

This dashboard attempts to trace back the Balloonsville rug pool and using data provide more insights into the incident.

Data-driven review of the incident

The total volume of Balloonsville secondary sales (of 5000 NFTs) on Magic Eden since February 5th is as follow:

To better understand the incident we should zoom in on the first two days.

The graph below shows the hourly volume of Balloonsville NFTs and the average hourly price. As can be seen, the price started an upward trend in the first 16 hours. Then, followed by publishing the Twitter post, the price suddenly dropped down to hourly 0.19 SOL. The price remained at this level for 12 hours, then it started an upward trend again.

Interestingly, growth in volume nearly before publishing the Twitter post is also obvious in the graph which shows the start of rug pulling.

Aftermath of the incident

By official announcement of 'derug', users could get 1 sol against burning their NFTs.

The data shows that only few users burnt their NFTs and uses the opportunity of 1 SOL payback (75 NFTs in total). It is logical because the price in market soon exceeded 1 SOL.

The Balloonsville was a major rug pull incidents on Solana blockchain (around 7000 users were involved in the secondary sell). This could hurt the reputation of the network and also users trust. However, the community driven rescue attempt helped the Solana to some good extent.