The digital asset Grok, alluding to Elon Musk’s AI endeavors, has seen its valuation plummet by 74% amid allegations of fraud from renowned blockchain analyst ZachXBT.
Unveiling the Controversy
ZachXBT exposed the project on social media on November 13, suggesting that Grok’s existence was largely superficial, recycling components from obsolete projects such as the defunct memecoin ANDY. This revelation triggered Grok’s value to nosedive from a high of $0.027 to a low of $0.007 within a brief span of hours. A modest rebound was observed later, with the token’s value correcting to $0.011, as per the trading analytics platform DexTools.
Strategic Response and Token Burn Measures
In response to the unfolding situation, the team behind Grok undertook a strategic move by transferring an estimated $1.7 million worth of Grok tokens to a burn address, effectively withdrawing 90 million tokens from the circulating supply, a fact substantiated by the transaction records on Etherscan.
In a subsequent announcement, the Grok developers stated that all tokens held by the deployer had been burned, amounting to around 180 million Grok tokens, which equates to roughly $2 million based on the token’s current market valuation.
From Peak to Trough
On the cusp of the allegations, Grok’s market capitalization was approximately $200 million, ranking it amongst the breakout memecoins of the cycle.
Grok’s AI Persona
Grok, an AI chatbot inspired by the satirical narrative of “The Hitchhiker’s Guide to the Galaxy”, is known for its witty retorts. Musk, who has publicly expressed caution over AI’s potential risks, announced that Grok would become available to premium subscribers on his social media platform after extensive testing. Notably, Grok can interact with user posts on the platform with a distinctive sense of humor.
Investor Caution Advisory
Given the low trading volumes witnessed, investors are advised to approach GROKAI with caution, as it presents a heightened risk for market participants.
Musk’s Position on Cryptocurrency Ventures
It is crucial to note that Musk has explicitly stated that his companies, including xAI, have no intention to delve into the realm of cryptocurrency creation.