Chainalysis: 24% of the new tokens launched in 2022 have the potential for "pump and dump."

2023-02-17 09:14:36

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ChainCatcher news, the blockchain data platform Chainalysis released a report stating that based on on-chain data feature analysis, 24% of the new tokens launched in 2022 have the potential for "pump and dump."

It is reported that "pump and dump" in traditional finance is quite simple: holders of tradable assets (such as company stocks) heavily hype and promote the asset to other investors, often using misleading statements, causing the price to rise rapidly when new investors buy in. Then, the holders sell their overvalued stocks for profit, leading to a price crash that leaves new investors stuck with low-value assets.

"Pump and dump" has also become quite common in the crypto world. This is mainly because bad actors can relatively easily launch new tokens and artificially set high prices and market caps by controlling initial trading volumes and circulating supply. Furthermore, the teams launching new projects and tokens can remain anonymous, which allows serial offenders to implement multiple pump and dump schemes. (source link)

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