Cardano’s attempts to portray itself as a blockchain more secure than others were jolted when CardStarter and SundaeSwap, both building on the Cardano blockchain, accused each other of foul play, broken promises, and accusations of a rug pull event.
The feud between the two projects erupted across social media on Monday, much to the chagrin of the Cardano community and its founder Charles Hoskinson.
Beginning Of The Problem
Apparently, the issues had started cropping up back in April when CardStarter announced that it would be launching its own decentralized exchange. After the announcement, investors were incentivized to provide liquidity for the project on Uniswap for CSWAP tokens. Things get slightly complicated here because CardStarter developers then signed an agreement with another decentralized exchange, SundaeSwap.
This agreement with SundaeSwap was marketed as a merger in June, and according to the agreement, CardStarter would no longer focus on developing its decentralized exchange and instead provide liquidity to the SundaeSwap decentralized exchange.
Users Left In The Lurch
A Reddit post described this as a huge red flag that CardStarter had decided to scale back its own plans for a decentralized exchange and provide liquidity to SundaeSwap. This led to $CSWAP liquidity providers being stranded and left in the lurch. However, token holders were led to believe that the deal with SundaeSwap would be beneficial for them.
However, when the actual benefits were revealed, the liquidity providers were not a happy lot,
“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.”
The Reddit poster further stated that the benefits were worthless and described it as similar to a rug pull event.
CardStarter And SundaeSwap Respond
Both CardStarter and SundaeSwap decided to respond on Social media and decided to air their grievances in public, much to the annoyance of the ADA community. CardStarter put out a tweet that contained screenshots that seemed to insinuate that SundaeSwap had reneged on an earlier promise. The tweet stated,
“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.”
SundaeSwap, on their part, tried to distance themselves from the fiasco, tweeting out,
“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.”
However, SundaeSwap has acknowledged that it had used vague or misguided terms on occasions when communicating with users. To add another twist, the newly launched SundaeSwap DEX hasn’t had the smoothest of sailings, having already suffered from several failed transactions, according to numerous users.
Hoskinson Less Than Impressed
Charles Hoskinson, Cardano founder, was critical about how the two organizations handled the entire situation, calling it unacceptable that SundaeSwap and CardStarter had to resort to social media to give their side of the story. He further stated,
“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.”