Cardstarter and SundaeSwap are embroiled in drama, with each accusing the other of foul play.
Cardano has gone to great lengths to paint itself as a more secure ledger. For example, in basing its development and optimization on research and formal verification.
This latest incident highlights that robust protocol is not necessarily a guarantee of security or equitable treatment on any chain.
In April 2021, Cardstarter announced the launch of Cardswap, a decentralization exchange that is billed as the Uni swap of Cardano.
With the announcement came a liquidity mining program where liquidity providers onEthereum s Uniswap earn CSWAP token, making it an attractive proposition for investors who want to get in early with Cardswap.
The Reddit post stated that the first red flag was when Cardstarter decided to scale back the plans for Cardswap. Instead of operating a standalone DEX, Cardswap would now provide liquidity for SundaeSwap.
This had CSWAP liquidity providers wondering where they are. CSWAP holders were led to believe that the SundaeSwap deal would be even better for them.
The actual benefits were revealed last week, leading CSWAP liquidity providers less than impressed.
A rug pull involves the developers abandoning the project, which is not the case with Cardstarter. The Reddit poster felt like the whole scheme was a giant rug pull, because of the fact that buying CARDS directly would have been easier and cheaper. SundaeSwap tried to distance themselves from the situation, despite the fact that they did not state their side of the story.
SundaeSwap is not responsible for how Cardstarter depicted their partnership with investors, according to a Medium post.
SundaeSwap says that they now conclude their agreement with Cardstarter because of the circumstances. SundaeSwap will air 20 million SUNDAE token to CSWAP holders despite apparent representations by Cardstarter.
Aatash Amir, CEO of Cardstarter, responded to the Medium post by revealing SundaeSwap reneged on an earlier agreement.
SundaeSwap has agreed to set aside 150 million SUNDAE token for the partnership in October 2021, according to Amir. This was reduced to just 10 million as of January 18.
Amir said he will continue to fight for a better deal for the CSWAP community.