GuShiio.com Pledge, repurchase, unilateral pool, contract…
Author: Shushu
The market has been falling continuously, and many altcoins have no place to fall. Many people believe that the bear market has arrived. The market adjustment period is often a period of concentrated release of risks, but it also contains opportunities for investors to improve their awareness and accumulate strength. In reviewing this market cycle, the exit strategies of various dealers can be described as multiple, and the carefully designed shipping methods are also worthy of our in-depth analysis.
Traditional market manipulation theory believes that the banker’s operation is nothing more than four stages: attracting, pulling, washing and shipping. However, its core essence is always the precise control of the emotions and behaviors of market participants. Through stock price fluctuations and the passage of time, dealers can subtly influence individual investors ‘decisions and ultimately maximize their own interests.
So, in a complex and ever-changing market environment, how should retail investors effectively identify dealer shipping signals? How to improve our own awareness of risk prevention and avoid falling into the trap? Based on community discussions, BlockBeats summarized typical shipping routines including unilateral liquidity pools, false repurchase benefits, spot control contract harvesting, and high-interest pledge for readers ‘reference.
Add a unilateral liquidity pool, empty gloves and white wolves
The most typical operation of this shipping method of unilateral liquidity pool is the LIBRA token on the Argentine presidential platform some time ago. The LIBRA project party set up unilateral liquidity pools of LIBRA-USDC and LIBRA-SOL on the Meteora platform, that is, they only added LIBRA tokens to the pool, but did not add any counterparty assets such as USDC or SOL.
Source: Bublemaps
The operation of a unilateral pool is that if only SOL is added, then when the price of SOL rises, it is equivalent to continuing to sell SOL for USDC. If only USDC is added, you will continue to buy SOL when the SOL price falls. Applying this logic to LIBRA, since there is only LIBRA in the LIBRA pool and no USDC or SOL, any purchase of LIBRA will directly push up the price because there is no selling opponent, which creates the illusion of “only rising but not falling” in the early stages.
Because the project parties controlled most of the LIBRA tokens in circulation in the early stages, they did not need to provide real stablecoins or ETH as counterparties like platforms such as Uniswap. The project party only needs to place its LIBRA tokens at different prices to pay. Since there are few sell orders in circulation in the market, these purchase orders will be continuously traded, further pushing up the price and creating false prosperity.
When the “false prosperity” attracts a large number of investors, the price is raised to a high level, and enough funds are injected, the project party will start the next step-withdraw the pool. They quickly transfer stablecoins or other assets previously invested by investors when purchasing LIBRA to a predetermined collection address. Due to the special nature of the unilateral liquidity pool, there are no convertible assets in the pool. Investors cannot actually sell LIBRA at this time, and any new buying operation will only further push up the price that has no actual support. The project party has also completed the shipment purpose at this time.
In addition to manipulating prices, LIBRA projects also took advantage of the CLMM pool’s custom fee function. In this way, it earned an additional fee of more than 10 million to 20 million US dollars throughout the process, which was similar to TRUMP’s high fee at the time.
In addition, Mindao, founder of DeFi protocol dForce, analyzed that although Uniswap V3 also provides unilateral liquidity functions, its main purpose is to improve capital utilization and meet the needs of professional market makers. The key to LIBRA lies in the complex pool it adopts. Setting and highly customized, which makes its unilateral liquidity pool designed not to provide liquidity, but to facilitate subsequent price manipulation and liquidity withdrawal.
Repurchase is good but does not break through the sideways range
In August 2023, TGE’s GambleFi platform Rollbit officially announced that it would change token economics. 10% of Casino revenue, 20% of Sportsbook revenue and 30% of 1000 times contract revenue would be used for daily repurchase and destruction of RLB. After the news was released, the token price stimulated an increase, but the token price continued to fall after two months. Community users gradually discovered that there was an unknown “shipping” operation hidden behind it-the Rollbit team used Rollbit Hot Wallet to wash the coins, and then sell the coins to the market through the algorithmic shipping address.
Repurchase is usually regarded as a means for project parties to stabilize the market and increase currency prices. Under normal circumstances, the funds purchased back should come from the project party’s profits or capital appreciation, but if the funds come from the project party’s “hot wallet”-an internal wallet used to store a large amount of tokens or funds-then the funds are not external funds flowing into the market, but funds held in advance by the project party.
Suppose the project party invests funds into the repurchase market through its own hot wallet. In fact, these funds still belong to the project party itself. When the project party uses these funds to purchase tokens on the market, they may not be actually destroyed or disappeared, but returned to the project party. Because the repurchased tokens may flow back to the algorithmic shipping address controlled by the project party through the hot wallet and enter the market again.
Token prices continue to fall, and community members question the Rollbit team's failure to provide transparency across different chains and markets
The method of “selling 30% of the goods and buying back 10%” will inevitably not be able to effectively increase the currency price. Instead, it will be another shipment scam carefully deployed by the project party.
Spot control, contract short orders are harvested crazily
“I don’t like that you can short” once became the intra-exchange trading method with the highest winning rate in this round. Although the current new currency rates are often pulled up and down, since the “VC currency” crusade, most secondary trading targets have experienced a few days of decline, then quickly pulled up, and then entered a long negative cycle. However, this is also one of the shipping methods. The core lies in taking advantage of the lack of liquidity in the contract market and the mentality of retail investors to chase after gains and kill losses.
The whole process can be summarized into several stages: First, in the early stages of the launch of the new currency, market makers usually choose not to protect the market, allowing retail investors who received early airdrops to sell. The main purpose of this stage is to clean out short-term speculators and make room for subsequent operations.
Subsequently, the market maker began to prepare for pull-up and shipment. Before that, they will try to control spot chips as much as possible, reduce liquidity, ensure that selling does not have a substantial impact on prices, and also limit the possibility of short sellers borrowing money. When spot chips are firmly controlled, market makers can use relatively little funds to raise prices and even trigger short cuts. When users choose to follow the spot purchase and open contracts for a long time, the project party/Market makers/large institutions have accumulated enough buyers to ship in batches and start harvesting again.
When short positions in the market decrease and prices are pushed up to a certain extent, market makers begin to use the contract market to harvest liquidity. They will quickly increase the price of the currency to attract retail investors to chase after the increase and create false prosperity. This rally is usually considerable, but generally does not exceed the opening price. Subsequently, the open interest in the contract will increase significantly, and the funding rate will begin to turn negative, which is a signal that market makers will start to establish short positions.
Finally, traders gradually sell off in the spot market on the one hand. Although the profits from this part are limited, more importantly, they gain sufficient exit liquidity by shorting in the contract market. A large number of retail investors have become long positions in the process of chasing gains, providing counterparties to market makers ‘short positions. As market makers continued to add short positions in the contract market and sell off in the spot market, the currency price began to fall, causing a large number of long positions to explode, thus achieving double harvest.
Xiao San can’t play pledge games
The pledge of a token was once regarded as a good release at the pace of project operations. The original intention was to encourage users to participate in network maintenance, reduce market circulation by locking positions, and enhance the scarcity of tokens. However, many project parties used this mechanism as a cover., to cash in on goods.
The project party uses high-interest pledge rewards to attract investors to lock up a large number of chips. On the surface, it hopes to stabilize the currency price by reducing market circulation. However, the actual result is that most floating chips are trapped in the lock and cannot be withdrawn in time. In this process, the project party and the retail investors who choose to pledge are in an environment of unequal information. On the one hand, they can ship at will; on the other hand, even if the project party or large households choose to pledge, they will still reap high pledge income and continue to smash the price.
In addition, there is also a scenario where when the pledge period ends and investors begin to sell tokens in panic, the project party will absorb chips at a low price and wait until the market sentiment stabilizes and the price rises before cashing out. At this time, investors flocked in amid the appearance of price recovery, but the main force had already completed the shipment operation, leaving behind leeks that took over at a high level.
Looking at the above shipping methods, the essence is all a precise control and game of market expectations and investor psychology. To survive in the unpredictable market, retail investors need to have a Zhuang mentality. The so-called “Zhuang’s psychology” does not mean manipulating the market like a banker, but means having the ability to think independently, not being influenced by market emotions, being able to predict risks in advance and formulate corresponding coping strategies.
The market is an amplifier of emotions. Only by staying calm and rational can we avoid becoming the target of harvest. The next time you hear the words “repurchase”,”pledge” or “unilateral pool”, you might as well be more vigilant and you may be able to avoid the “trap” carefully designed by the project party. You can tell in the comment area what other shipping methods do you know?
Reference link:
https://x.com/MasonCanoe/status/1891364478572462296
https://x.com/kylopeung/status/1891063885911716341
https://x.com/Michael_Liu93/status/1830425923403059603
