Altcoin Founder Said Things Have Changed, Explained How Tokens Are Inflated and Sold! - Coin Bulletin

Kain Warwick, the founder of Synthetix, stated that during the ICO period, market makers were paid between $50,000 and $300,000 per month to attract investors to projects and to be listed on exchanges.

Warwick states that starting from the ICO ( period, market makers have been collaborating with projects to sell tokens at high prices. However, today these strategies have become much more sophisticated.

Warwick stated that market makers, who sell large amounts of tokens in markets with low liquidity, raise prices and then sell the tokens in a way that will lead to a decline in order to make a profit. Projects initially sell their tokens to liquidity funds at low prices, and then they negotiate on market offers.

Warwick emphasizes that SBF, )Sam Bankman-Fried(, is the person who developed these manipulation strategies. He states that initially, market makers offered investors large profit promises by using “call” options, but in reality, the market makers devalued these “calls” and obtained profits through sales made at low prices. In such strategies, market makers can sell tokens in advance and buy them back at low prices to create a “short” )short position(.

According to Warwick’s posts, nowadays projects sell their tokens to liquidity funds before the TGE )Token Generation Event( and ensure that these funds provide bids in the market by agreement. At the same time, a large block of tokens is sent to market makers in line with exit strategies, and these inflate the price with low liquidity and sell. In this process, tokens quickly rise to high prices, making them attractive for investors, but prices drop rapidly after a few large sales.

Warwick points out that such tactics are often used by market makers and investors should be cautious. Market makers can achieve significant profits by exploiting markets with low liquidity. However, Warwick emphasizes that sending a token to a large market maker is usually used as the investor’s exit liquidity. This requires investors to be particularly skeptical when large token blocks are sent.