GALA token took a huge dive in price last night as a third party company, called pNetwork, who runs the pGALA token on Binance Chain, suddenly printed 1 billion tokens! Supposedly, this was in preparation for a reset of the pGALA token. But their unannounced mint caused panic across chains.
This was a kind of strange event. It began when a watchdog service noted that 1 billion pGALA tokens were suddenly minted. The pGALA tokens are meant to be the equivalent of GALA tokens, just on the Binance Chain instead of Ethereum. However, this is not something official from Gala Games. Instead, this is a third party service that an organization called pNetwork decided to run on their own.
pNetwork resets pGALA
pNetwork created a bridge platform, allowing users to deposit their Ethereum based GALA tokens, in exchange for an equal number of pGALA tokens on the Binance Chain. They also set up a liquidity pool on Pancake Swap for traders.
Apparently, the pNetwork team noticed a misconfiguration on their bridge protocol. Fixing it requires a new deployment of the pGALA token. So, they minted a billion tokens for themselves, and tried to drain all of the liquidity from the Pancake Swap pool to keep users from trading the old tokens that would soon have no value.
However, they had some trouble doing so as people were still trading the tokens. I’m not sure why pNetwork expected every single trader to keep a close eye on the pNetwork Twitter posts. But, it seems they thought that was the proper way to distribute their message.
pNetwork says that they took a snapshot of pGALA token holdings on Pancake Swap Thursday evening. Holders should receive the equivalent amount of new tokens. Once everything is sorted out. The pGALA token was apparently also trading on a couple of centralized exchanges. I’m not sure what pNetwork’s plan is there.
This is a huge black eye for pNetwork. And though they claim they were doing this to protect users, the way they went about it instead sparked panic, causing a drop of over 20% in the value for the official GALA token!
This event shows both the potential and dangers of decentralized systems. The fact that a third party can create this service to host GALA tokens and provide liquidity for them on a different Chain is pretty cool. But on the other side, though this issue doesn’t have any direct effect on the actual GALA tokens on the Ethereum network, it did have a significant effect on the token price. And though Gala Games is not associated with pGALA tokens, the average user doesn’t know that, and assumes that they are all interlinked. So a drop in value one one chain should reflect in the other chains as well. Which it did. In fact, the GALA token value is still down 10% from yesterday!
You can check the pNetwork Twitter feed for more details on this event. They also plan to release a post-mortem report sometime in the near future.
For now, just stay away from pGALA entirely if you’re not already involved. If you do have pGALA tokens, just hold them for now, wait, and hope for the best!