startup

Viewpoint: Some market makers profit from token lending, trapping crypto startups in a death spiral

ChainCatcher news, according to Cointelegraph, suitable market makers can act as boosters for crypto projects, helping them to launch on mainstream trading platforms, providing liquidity, and ensuring that tokens are tradable. In the field of market making, a popular yet often misunderstood model is called the "loan option model." In this model, the project lends tokens to market makers, who then use these tokens to provide liquidity, stabilize prices, and assist the project in launching on crypto trading platforms. However, in reality, this model has become a "death sentence" for many new projects.Behind the scenes, some market makers are profiting from this token loan structure, which is often packaged as "low risk, high return," but in reality can severely impact token prices, leaving nascent crypto teams in chaos and struggle. Ariel Givner, founder of Givner Law, stated, "The way it works is: market makers borrow tokens from the project at an agreed price, in exchange for their promise to help these tokens launch on major trading platforms. If they fail to fulfill this promise, they must repay the tokens at a higher price within a year."However, what often happens in reality is that market makers sell the borrowed tokens, triggering an initial price crash. After the token price has been driven down, they then buy back the tokens at a lower price, profiting from the difference.

Coinbase founder: Thank you to the Trump administration, paying tribute to crypto startups that went bankrupt due to inability to afford legal fees

ChainCatcher message, Coinbase founder stated, "Thank you to the Trump administration for winning the election and for the departure of the SEC's aggressive chairman Gary Gensler, who, along with Elizabeth Warren and some followers in Congress, orchestrated this illegal act.I believe we will win this case in court regardless, as our facts are so strong, but it undoubtedly accelerated this process and pushed for accountability. I pointed out the SEC's suspicious behavior as early as 2021, and I believe this comment has proven to be prescient. I want to give special recognition to all the other crypto companies fighting the SEC through litigation (we are clearly not the only ones). I want to especially honor those crypto startups that went bankrupt due to the inability to afford legal fees; although your companies may be dead, the crypto industry still exists.Do not stop building. I want to give special recognition to all the Democratic and Republican lawmakers working hard to ensure that the U.S. remains a leader in the crypto space. I know that Gary Gensler and Elizabeth Warren do not represent the entire Democratic Party. Finally, I want to give special recognition to all American crypto holders who support pro-crypto candidates; you have ensured that your rights are protected. It turns out that crypto voters are real, and they show up in the millions.I expect we will continue to maintain a positive collaboration with the SEC in various matters in the future, just as we do with other agencies in every country and region where we operate globally. I look forward to reforms at the SEC under the leadership of Paul Atkins, Mark Uyeda, Hester Peirce, and DOGE, welcoming more rational leaders.I also commend the new leadership for working to correct this mistake—this is a great step in the right direction and requires courage. Now, let’s push for the U.S. to enact crypto legislation, clarify the rules, and truly kickstart the next phase of building."
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