How We Used Mainline To Spot A Rug Pull 30 Days Before It Happened
You know that feeling you get when you stumble across a new project on Twitter and it has all the signs of mooning, but you finally caught it before the parabolic pump?
The token hasn’t launched, yet their social media is blowing up, the website looks great, the white paper makes sense, and you can see the utility of the project…
That rare find that lets you know all of the hours spent on Twitter, in Telegram, or on Discord have finally paid off. Finally, you’re going to be early, instead of missing those degen gains again. This is the moment where everything changes for you.
That’s exactly how we felt when Flag Network’s post popped up in our Engagement algorithm. To be fair, Mainline gives us a little advantage and allows us to filter out all the noise and see who is taking off in real-time, but we’re getting ahead of ourselves.
Flag Network had just made a post about getting listed on Binance and it was blowing up with 40k retweets. That’s a great sign and if they were on Binance they had to be legit! Scrolling through their Twitter feed we saw good engagement, solid posts, nice graphics, and over 300k followers.
To the average investor, this looked like a great project that was about to blow up. We could feel the FOMO building and we wanted in on this but one thing caught our attention. Their “listing” on Binance was only the price, no trading yet.
Were we that early? Was it too good to be true?
It was time to put Mainline to the test and be sure. Most social listening tools on the market are pretty good at finding viral content or showing you what’s trending now. What they can’t do is tell you if those numbers are real.
With the rise of cryptocurrency on social media sites like Twitter and the opportunity for a huge payday, this also created many bad actors manipulating the algorithms to inflate their presence and give a false sense of legitimacy. The problem is that it’s almost impossible to spot who is real and who isn’t, unless you look through every post, comment, and follower.
Mainline can do all of that automatically and then create reports with the information you need to make the right decision on a project. Here’s how we do it…
First, we ran a Follower Audit for Flag Network’s post and the results were alarming. The Mainline Follower Audit goes a step beyond Flag Network’s account and looks at how many people follow their followers. Either way, when an account gets so big you do expect to see a few bots and accounts without many followers. It’s the nature of social media and a healthy range is between 10–30%, depending on their size.
70,037 followers on Flag Network’s account had nobody following them and 184,210 followers had less than 10 people following them. More than half were low-quality accounts comprised of either bots or new accounts that they had created to inflate their numbers. This ensures that all of their posts look like they have an active and engaged audience to game the algorithm.
To verify this, we ran our Duplicate Profile Pic Follower Checker. This shows if any of their followers share the same profile picture, another obvious sign that the accounts in question are fake. The result…
It’s so obvious that to even comment on the image above feels like an insult to anyone’s intelligence. Even worse, when we dug into the team behind the project the only LinkedIn account we found for the team had a stock photo for their profile picture that was photoshopped.
We kept an eye on this project over the next few weeks and more alarm bells started going off. They had $1m in trading volume with very little liquidity. They were inflating their numbers by using the same 20–30 wallet addresses to wash-trade as the project approached its IDO unlock on March 28.
We made a few tweets with our initial findings to warn the (few) real followers who were about to lose their money when this project rugged. As it often happens, Flag Network wasn’t too happy about this so they started spamming our discord with links to their project.
That’s fine, we’re used to this. It’s usually a sign we’re onto something they don’t want people to know about.
We kept digging and found an image of Flag Network’s CEO giving a presentation about the future of Flag Network. The problem was that the image was originally posted several years ago during a presentation called Future of Blockchain 2. The bad photoshop job only fueled our fire to expose this project.
Flag Network Fake Presentation:
Original Presentation from JSE coin from three years ago:
Got ya.
At this point, we had no doubt Flag Network was a house of cards but we like to be thorough so we ran one final audit, the Mainline Retweet Audit. We selected a tweet that had high engagement and selected 13,000 of their retweeters for a sample size.
72.56% of the retweets came from accounts with fewer than 10 followers. Their engagement was from fake accounts, engineered to give the appearance of a well-established social media presence.
The day of the unlock came and the chart began to fall rapidly. 200BNB of liquidity was removed around 8:30pm EST on March 30th dropping the price by 97% and then a few hours later a 200BNB sell.
Surprisingly the price recovered and a post from the team came out blaming an issue with the smart contract and they would fix the problem before the new unlock on April 4th.
April 3rd came. The chart dropped and flatlined. Flag Network was dead on arrival. Flag Network’s team has disappeared, completely leaving their holders to wonder what went wrong and how they got here. The worst part is there’s not much an investor can do except eat the loss, learn the lesson, and try not to repeat it.
To the new or casual investor, hearing about projects like this over and over can deter anyone from getting into crypto. It’s projects like this, more than anything, that will prevent crypto from mass adoption by the public.
To just about anyone on Twitter, Flag Network appeared to be a legitimate project. They had a large social media following, great engagement all over for the project, and everything else most people look for when doing their research.
Without looking at each like, comment, or follower it would be impossible to know that more than half of their social network was fake. And because of that, a lot of people lost money they didn’t need to lose.
This needs to end but we can’t do it alone.
If you’re still reading this, then you’re exactly the type of person we need to start this revolution to clean up social media. Using Mainline Verification, you can start to find bad actors and expose them before they can do any more harm.
Find projects and influencers you think look suspicious and start running audits for yourself. Make sure to share them far and wide so everyone knows who’s been #MainlineVerified.
We want the good actors praised for doing things right and the bad actors exposed so they can’t trick anyone else. And we can’t do it without you.
Mainline Audits are currently free and you can request as many as you’d like. All we ask in return is you make sure to share your results and include #MainlineVerified in your posts.
