On December 17, during the initial trading launch of the PENGU token, an anonymous trader tried to jump ahead. Armed with the token’s contract address, they placed a buy order via the Jupiter aggregator before the official launch, aiming to snag the token at the lowest possible price. This strategy, known as sniping, typically relies on specialized bots capable of executing trades within milliseconds.

However, the trader either used a poorly configured bot or acted manually. As a result, their trade ended up in an incorrect liquidity pool on the Raydium DEX platform, created before the official trading began.

On decentralized exchanges (DEX), token prices are determined by liquidity pools, which hold tokens and calculate prices automatically: the fewer tokens left in the pool, the higher the price. When liquidity is low, even small trades can cause sharp price increases.

In this case, the pool had almost no liquidity, causing the price of PENGU tokens in it to skyrocket. This inflated the token’s market cap to $14 trillion. Consequently, the trader paid over $10,000 in SOL tokens for 78 PENGU, which were worth just $5 by the end of the transaction.