Synthetix Founder: If the project party has not signed a contract with market makers, it will be difficult to complete financing. Market makers profit through low liquidity models and options structures

2025-03-26 15:50:13
Collection

ChainCatcher news, Synthetix founder Kain Warwick revealed market manipulation tactics by market makers in a post on platform X. He stated that during the ICO era, if project teams did not reach agreements with multiple "market makers," it was nearly impossible to complete financing, with monthly costs reaching as high as $50,000 to $300,000.

Today, these market-making agreements have evolved into options structures, with some market makers manipulating the market through low float models, shorting at the peak of TGE, covering at the bottom, and then exercising options to dump after pushing the price up. SBF previously used low float models to further fuel this arbitrage strategy.

Recently, a new tactic involves project teams selling tokens to liquidity funds at a discount before TGE and guiding market makers to sell directly after a low float pump. DWF Labs previously operated Synthetix using a similar method, first buying tokens from the treasury to pump the price, then dumping to cash out.

Project teams have many ways to extract value from token buyers. If you see a large amount of tokens being transferred to "market makers," be particularly cautious; they are likely just treating you as exit liquidity.

ChainCatcher reminds readers to view blockchain rationally, enhance risk awareness, and be cautious of various virtual token issuances and speculations. All content on this site is solely market information or related party opinions, and does not constitute any form of investment advice. If you find sensitive information in the content, please click "Report", and we will handle it promptly.
ChainCatcher Building the Web3 world with innovators