- Grok chatbot debuts, promising unfiltered AI interaction.
- GROK tokens emerge, unaffiliated with Musk’s AI.
- Rug pulls hit GROK tokens.
Elon Musk’s new venture, xAI, has entered the spotlight with its debut of ‘Grok,’ an AI chatbot designed to compete with ChatGPT. Following this, numerous unrelated tokens have co-opted the name GROK.
These tokens are riding the waves of AI and Musk’s celebrity. However, investors should know these tokens are unrelated to Musk’s AI chatbot. Moreover, many have already been rug-pulled by their developers.
GROK Token Hype
On Saturday, November 4, Elon Musk unveiled his latest AI venture, xAI, unveiled Grok. The chatbot is modeled after “The Hitchhiker’s Guide to the Galaxy” and is made to tie humor in his responses. This AI aims to offer wit and a rebellious streak, engaging users with responses to more provocative inquiries that other AIs might avoid.
Musk’s Grok is in its nascent stage, only two months into training. The chatbot will be integrated into the X Premium+ tier, which comes at $16 per month. The move makes it a competitor to Open AI’s chatGPT.
Amidst the buzz surrounding Musk’s Grok, the crypto market saw an influx of GROK tokens starting early Saturday. These tokens capitalized on the name but had no connection to Musk’s AI or xAI. By Monday morning, the proliferation of GROK tokens had led to a significant market movement, with one token on Ethereum amassing a market cap of $10 million and 4,600 holders.
The emergence of GROK tokens illustrates the speed at which the crypto market can mobilize around a new trend. However, it also emphasizes the dangers to users. By November 6, numerous GROK tokens had already reportedly been ‘rug pulled‘ by their teams.
Grok Rug Pulls: How to Stay Safe When Investing in Hype Tokens
Before investing, investigate who is behind the token. A credible team with known industry figures is less likely to pull the rug from under investors. If the team is anonymous, consider this a red flag. Examine the project’s white paper for feasibility and practicality; if it lacks substance or seems too good to be true, it probably is.
Also, check the token’s liquidity provisions. Are the liquidity pools locked for a certain period, or can the developers drain them at any moment? Tokens with locked liquidity are generally considered safer.
Engage with the community and developers. Legitimate projects usually have active, transparent communication channels. If the team’s responses are vague or non-responsive to critical questions, proceed with caution.
On the Flipside
- Traders should exercise caution with hyped-up crypto projects. For instance, in 2021, the team behind the Squid Game Token did a $7 million rug pull against their community.
- Even some traders who understand the difference between Musk’s Grok AI and the GROK tokens might willingly engage in speculative trading. These traders may hope for short-term gains despite the risks.
Why This Matters
GROK tokens represent the speculative nature of the crypto market, where hype can often overshadow substance. Recognizing this fact is crucial for investors.
Read more about the Squid Game rug pull:
Squid Game Token Drops More Than 99%