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Elysionyx ($ELYS) rug pull wipes 98% of value after Virtuals Protocol promotion, triggering community backlash and losses.
Author: Akshat Thakur
March 8, 2026 — Elysionyx ($ELYS) Rug Pull allegations surfaced after the AI agent token collapsed by roughly 98 percent within 24 hours of launch. The project briefly reached a market capitalization near $900,000 before crashing to a fully diluted valuation of around $7,000. The sudden collapse occurred shortly after a promotional retweet from Virtuals Protocol’s official account. The tweet was later deleted, intensifying community criticism and raising questions about launchpad oversight.
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Johnny_TVL
@john_tv_locke
@virtuals_io You guys do a great job supporting so many teams and builders and giving permissionless access to great products and investment opportunities. Appreciate the comms here and know you will take this learning to get better and continue to provide an incredible product and service
We featured an ecosystem project earlier today that has since been removed. We're tightening our review process for ecosystem spotlights to ensure verified, credible builders are recognized.
03:24 PM·Mar 8, 2026
NguyenHoang
@NguyenHoangLabs
@virtuals_io However, many people ended up losing money on this project, especially since Virtuals posted about it and indirectly gave the project a level of validation. If possible, @virtuals_io could consider compensating some of the users who lost money, as many people trusted the
We featured an ecosystem project earlier today that has since been removed. We're tightening our review process for ecosystem spotlights to ensure verified, credible builders are recognized.
08:32 AM·Mar 8, 2026
Auza
@_Auza_
@virtuals_io I lost money there. What are you going to do about it? I was holding because Virtuals reposted that tweet.
We featured an ecosystem project earlier today that has since been removed. We're tightening our review process for ecosystem spotlights to ensure verified, credible builders are recognized.
08:13 AM·Mar 8, 2026
Steady attention without excessive speculation.
Virtuals Protocol launched in late 2024 as a platform designed to support the creation and deployment of autonomous AI agents. Built on Coinbase’s Base blockchain, the platform allows developers to launch AI-driven applications for sectors such as DeFi, gaming, and social media.
The platform gained attention during the early AI agent narrative in crypto markets. Projects launched through the ecosystem aimed to combine artificial intelligence automation with token-based economic incentives.
Virtuals Protocol’s native token, VIRTUAL, previously experienced major volatility. After reaching a peak price near $5.1, the token later declined sharply as demand for AI agent tokens weakened.
Despite the market downturn, the platform has generated over $39 million in cumulative revenue since launch.
The Elysionyx ($ELYS) Rug Pull accusations emerged shortly after the token launched on March 7, 2026.
Initial hype pushed the token’s market capitalization close to $900,000 while trading volume exceeded $800,000. Some reports indicated the token surged more than 3,000 percent during early trading.
Shortly after reaching its peak, the token began collapsing rapidly. Within hours, the price dropped more than 90 percent before ultimately falling about 98 percent from its high.
The sudden crash triggered speculation that the development team had abandoned the project after the launch.
Blockchain analysis revealed activity from a wallet believed to be connected to the project’s developer.
The wallet reportedly extracted approximately $12,000 worth of liquidity during the price collapse. While the amount may appear small, it occurred during a period of heavy selling pressure that wiped out most of the token’s value.
Community estimates suggest that total losses across investors exceeded $100,000. After the crash, the project’s online presence disappeared, with developer accounts reportedly deleted or inactive.
Community criticism intensified because the project had been promoted through the Virtuals Protocol ecosystem. The platform’s official account retweeted a post referencing the Elysionyx AI agent shortly before the token surged. The retweet was later removed after the crash.
Some users argued that the promotion gave the project credibility and encouraged investors to participate. Following the collapse, several community members demanded explanations from Virtuals Protocol and questioned the platform’s vetting process for projects launched within its ecosystem.
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