Squid Game token: the coin you could buy but not sell

In this lesson

find out how the SQUID token rose tens of thousands of percent and then fell to zero in minutes
learn the main types of rug pull – liquidity pull, honeypot, slow rug and infinite mint
get a simple checklist for any new token before you buy it

What happened to the Squid Game token? SQUID was a token launched in October 2021 that used the name of the Netflix hit "Squid Game", with no connection to Netflix. Within less than two weeks its price rose from around a cent to roughly 2,861 dollars – but buyers could not sell. On 1 November 2021 the anonymous developers pulled about 3.4 million dollars from the liquidity pool, the price fell to almost zero within minutes, and the team disappeared.

In the TV series, players who could not get out of the game had a very bad day. The token copied that part of the show remarkably faithfully.

A honeypot token lets you in with a smile – the exit simply is not in the code.

How SQUID worked#

A famous name and a game. SQUID promised an online "play-to-earn" game based on the series. The website looked slick; the team was anonymous.
A chart that only went up. The token traded on a decentralised exchange on BNB Smart Chain. Media around the world wrote about the incredible gains – and more people bought.
A hidden rule: no selling. To sell SQUID, you supposedly needed another token, "Marbles", which you would earn by playing the game. The game never came. In practice, the smart contract let you buy but not sell – a honeypot token.
Because nobody could sell, the price could only rise. Every buy pushed the chart higher and attracted more buyers.
The exit. On 1 November 2021 the developers swapped their tokens for the BNB in the liquidity pool and left with about 3.4 million dollars. The website and social accounts vanished.

Timeline#

Date	What happened
September 2021	"Squid Game" becomes Netflix's biggest hit
20 October 2021	The SQUID token goes on sale for about 1 cent
Late October	Media around the world report gains of thousands of percent; buyers say they cannot sell
1 November 2021	The price peaks at about 2,861 dollars, then falls to almost zero within minutes
1 November 2021	The developers disappear with about 3.4 million dollars

What is a rug pull?#

A rug pull is when a token's creators pull the rug out from under the buyers' feet and take the money. The main types:

Type	What happens	Example
Liquidity pull	Creators remove the money from the trading pool; the token can no longer be sold for anything	AnubisDAO (2021)
Honeypot	The contract lets you buy but blocks selling (or taxes it at almost 100 %)	SQUID (2021)
Slow rug	Insiders sell their large share bit by bit while still promoting the project	many memecoins
Infinite mint	The owner can print new tokens at will and sells them into the pool	many small tokens

AnubisDAO is the record for speed: in October 2021 it collected about 60 million dollars in ETH within roughly a day – with no website and no white paper – and then all the funds vanished from the liquidity pool. According to Chainalysis, rug pulls took about 2.8 billion dollars from investors in 2021 alone.

For more on why most new tokens die young, read the lesson Memecoins and launchpads.

How to check a token before you buy#

Try a tiny sell first. If you cannot sell 1 dollar's worth, you cannot sell 1,000. Many free tools also simulate a sale and warn about honeypots.
Read who controls the contract. Is the code verified on the block explorer? Can the owner mint new tokens, change fees, pause trading or blacklist wallets? If yes, all of it can be used against you.
Check the liquidity. Is it locked or burned, for how long, and how much of it? See the lesson SafeMoon for what "locked" should really mean.
Look at the top holders. If a handful of wallets hold most of the supply, they decide the price.
Check the story. A famous brand with no official link, an anonymous team, a launch days ago and a chart that only goes up – each one is a red flag; together they are a siren.

Warning signs you could have seen#

Borrowed fame. Netflix had nothing to do with SQUID. Using a hit name is free marketing for scammers.
"You will be able to sell later." Any rule that blocks selling now is a trap.
A perfect chart. A token that rises every hour without a single dip usually means nobody can sell.
Buyers complaining they cannot sell. Reports appeared days before the collapse – but the hype was louder than the warnings.
Anonymous team, no audit, comments turned off. Nobody accountable, nothing checked, no questions allowed.

Assume a new token can go to zero

Brand-new tokens are among the riskiest things in crypto. Before you buy, check that you can sell, who controls the contract and where the liquidity is – and if you cannot answer those questions, do not buy. Never put in money you need, and never chase a token because it is already up thousands of percent: by then you are the exit liquidity.

Common myths#

"It was in the news, so it must be real." Many outlets reported SQUID's gains before the crash. Media coverage is not a check.
"Rug pulls only happen to tiny projects." AnubisDAO collected 60 million dollars in a day.
"I can sell before the rug." With a honeypot you cannot sell at all, and a liquidity pull happens in one transaction.

Summary

SQUID (October–November 2021) borrowed the name of a Netflix hit, rose to about 2,861 dollars and could not be sold – a honeypot.
On 1 November 2021 the anonymous developers pulled about 3.4 million dollars and disappeared.
Rug pulls come in four main types: liquidity pull, honeypot, slow rug and infinite mint; in 2021 they took about 2.8 billion dollars.
Before buying a new token: test a small sale, check the contract owner's powers, the liquidity lock and the top holders.