A recent interview with LIBRA and MELANIA token creator Hayden Davis sparked a discussion of current crypto market issues, including memecoin manipulation and fraud by project “teams” (often, under the guise of a team, we see random people who have gathered to make money).
Let's list the most important points:
1. Most memecoin launches occur through private deals, where some or most of the supply is sold/given to individuals at a price lower than the planned price at the time of release.
2. Information about such tokens/transactions sooner or later becomes known to everyone, since with modern technologies it is difficult to keep secrets.
3. Hayden Davis's words "how do you make money then?" indicate that there is a group of people who firmly believe in insider trading and rigging as the only way to make money. Fairness and transparency of the game are not taken into account.
4. Early leaks create a class of snipers who have the technology and millions of dollars of capital to secure a large share of the supply in the first seconds of a token's life. Note that they have no connection to the team and will dump their tokens without hesitation at the right time.
5. The "teams" response to the problem above was to do the sniping themselves, in order to "limit" the supply that other snipers could grab and sell quickly and profitably. They don't think it's immoral, they even think it's a kind of "protection" of the project.
6. There is a gray area where Hayden says the proposal/ liquidity , also obtained by "pulling" liquidity from pools, is considered a "treasury" that must be used to maintain the schedule in the medium term. It is also the fund from which the team takes its profits.
7. The groups that run these hyped launches expect the coin to “live” for a couple of months and “1-2 years at most,” but in reality, their life cycles don’t exceed a few days. And they blame third-party interference, including so-called snipers, for this.
8. There is widespread cynicism among these insiders and the belief that all cryptocurrencies lack any utility or use case and are a zero-sum game. Therefore, their job is to find a fool who will invest in their memecoin and make them money.
9. There is a somewhat exaggerated view that traditional capital markets, such as stocks, are corrupt, despite all the rules and laws. At the same time, the idea that kriptovalyuta could become a new transparent and fair platform, is rejected as childish and naive.
From the points above, it follows that most of these cryptocurrency creators, and especially newcomers to the business, are not at all optimistic about the aspirations of cryptocurrency to create a space of decentralized finance, where only people are sovereign holders of their funds, where they carry out transactions without third-party intermediaries, any commissions and fees, and territorial boundaries.
They view cryptocurrency as a Wild West casino where no coin is considered useful and is merely a means of manipulation to make money at the expense of other people's losses.
The founder of Sonic Labs, Andre Cronje, spoke most accurately on this matter:
This market exists only to extract money from others. It has nothing to do with real projects.
