The Squid Game Token: A Play-to-Earn Game That Let You Buy but Never Sell

In the Netflix drama Squid Game, contestants sign up for a set of children's games with a huge cash prize, only to discover that the rules have been rigged against them. In late 2021, a crypto token borrowed the show's name and did almost exactly the same thing to its buyers.

The coin was called SQUID. It had nothing to do with Netflix. In roughly a week, its price went from about $38 to $2,861.80. Then, less than a month after launch, its anonymous creators disappeared with an estimated $3.38 million, and the token became worthless.

Riding the biggest show on Earth

The timing was perfect for a scam. Squid Game, the Korean survival drama, debuted on 17 September 2021 and became a worldwide sensation within weeks. Crypto was in the middle of its play-to-earn boom, led by Axie Infinity. Put the two together, and you had a pitch that sounded irresistible to a lot of people: a play-to-earn game based on the most talked-about show on the planet.

SQUID's backers promised exactly that. Buyers would use the token to enter an online game inspired by the series, and winners would earn rewards. The game was supposedly about to enter beta, with a full release later that month.

The catch: a game you had to win to sell

Here is the trick that made SQUID so effective. The token traded on PancakeSwap, a decentralised exchange, and anyone could buy it. But holders found they could not sell.

The project called this an anti-dumping mechanism. To sell SQUID, you first needed another token called Marbles, and the only way to get Marbles was to earn them by playing the project's game. That game was never shown to anyone. In practice, money could flow in, but it could not flow out.

The white paper's description of the game was a single, vague line: "Obtaining Marbles without using violence is the key to Squid Game." There was no explanation of how the game actually worked.

The vanishing act

With buyers unable to sell, the price only went one way, and it went fast: up roughly 75 times in about a week. Then the creators pulled the plug. They said they had been targeted by hack attempts and claimed to be depressed and overwhelmed by scammers. They lifted the trading restrictions and walked away.

By the time holders could finally sell, SQUID was worth almost nothing. The official website went offline and the project's Twitter account went dark. A set of character NFTs the project had issued vanished from the OpenSea marketplace. Holders who had watched their tokens climb to thousands of dollars were left with dust.

The warning signs

In hindsight, SQUID had almost every red flag you could list:

• No official link to the show or Netflix, despite using its name and imagery.
• Anonymous creators, with no studio, track record or accountability.
• A game nobody had seen, described in one sentence.
• A one-way market where you could buy but not sell.
• Price moves too good to be true, rising tens of times in days.

SQUID was not alone. The same autumn, the creator of the NFT project Evolved Apes disappeared with about $2.7 million raised for a promised fighting game, a story we cover in our piece on that rug pull.

WGC's take

SQUID was not really a blockchain game. It was a scam that borrowed the language of one. But it matters to the history of blockchain gaming because it shows how easily the 2021 play-to-earn hype could be weaponised. "Play to earn" sounded like a game. "Anti-dumping" sounded like a responsible design choice. Put them on top of a hit show's name and thousands of people stopped asking the most basic question: can I get my money out?

That question is still the right one. If a game makes it easy to put money in and hard to take it out, treat it as a warning, not a feature. For more on how the boom of that era turned into a bust, read our editorial on the lessons of blockchain gaming's crashes.