The efforts of Cardano to market itself as the most secure blockchain out there were quickly thrown into disarray with the mutual accusations of Cardano Blockchain-based SundaeSwap and CardStarter, citing violations of promises, foul play, and a rug pull specifically.
An all-out war escalated between the two projects on social media, and to say that Charles Hoskinson along with the rest of the community was dismayed is an understatement.
These problems started fostering right around the time of the announcement of CardStarter for launching its decentralized exchange in April 2021. In the aftermath of the announcement, incentives were given out to investors for providing liquidity for CardStarter for CSWAP tokens on Uniswap, which is where the tangling begins. The developers of the project went ahead and signed the contract with SundaeSwap, another decentralized exchange.
Instead of narrowing efforts on establishing the decentralized exchange for CardStarter, the agreement dictates that liquidity would be supplied for the decentralized exchange on SundaeSwap. The agreement was officially billed as a merger in June of 2021.
This, according to a Reddit post, was a significant warning sign that CardStarter had opted to shelve its own aspirations for a decentralized exchange in favor of providing SundaeSwap with liquidity. As a result, $CSWAP liquidity providers were left high and dry and in the dark. Token holders were persuaded to assume that the transaction with SundaeSwap would be lucrative and beneficial.
Nonetheless, when the time came for the real benefits to be collected, liquidity providers were shocked. The Reddit post included the following: “the team has 15M dollars of our liquidity now locked with them, and we now find out that our “great benefit” was just to get some more CARDS tokens at a ratio of 400 CSWAP to 1 CARDS – it’s practically a worthless benefit.” In so many words, the Reddit post dubbed this occurrence as a rug pull.
To the displeasure of the Cardano (ADA) community, the two projects CardStarter and SundaeSwap chose to post on social media and air their dirty laundry in front of the community and the rest of the world. CardStarter took to Twitter to reveal some screenshots in which it would seem that a pledge was broken by SundaeSwap.
In light of SundaeSwap's announcement, we share the following documents which we feel speak for themselves.
We will continue to fight for the CSWAP community. pic.twitter.com/6oM2rdcKYF
— CardStarter (@CardStarter) January 24, 2022
In light of the tweet, SundaeSwap did have a reply although it seemed as if it was trying to put miles between itself and the feud at hand by conveying, “we hope that the CS team is able to address their investor’s concerns in the near future. Finally, just to correct any speculation, SundaeSwap and CardStarter entered into a “Marketing and Collaboration Agreement” in June 2021. This was not in any sense a “merger” of the two entities, as explained in our own announcement about the agreement.”
SundaeSwap, on another note, has admitted to using ambiguous or misleading words during user interactions. An added kink to this whole situation is the less than lucky recently established SundaeSwap DEX, seeing as users have repeatedly reported a multitude of unsuccessful transactions.
The two organizations’ handling of the incident was heavily criticized by Cardano (ADA) Founder Charles Hoskinson, who called it deplorable that SundaeSwap and CardStarter had to take to social media and act out their feud in such a distasteful manner. He went on to say, “it’s despicable. It doesn’t do anything other than try to abdicate your personal responsibility and damage the brand of the ecosystem as a whole. Please, people, get your .. together. Both sides come together, agree to arbitration, talk to each other, and figure out whatever the hell you agree to get done. And if you can’t somehow survive the arbitration process, the courts are always available to you.”
Many of the members of the Cardano (ADA) community have expressed their frustration in regards to the public outbursts of both projects in a similar fashion.