- Solana protocol for short selling memecoins launches new market for opposing trades.
- The new platform could enable short squeezes on Solana memecoins.
- The memecoin cryptocurrency market has lost $13 billion since July.
Solana protocol Dumpy.fun is launching a new feature that will disrupt its original purpose of short selling Solana memecoins.
The new marketplace called Squeezy.lol will allow users to take the other side of the trade and potentially trigger short squeezes on heavily shorted memecoins.
Short positions refer to short positions taken by traders who bet on the price of an asset to fall. Short squeezes, on the other hand, occur when the price of such an asset suddenly increases, forcing punters to close their positions or buy the asset to limit their losses.
Squeezy.lol will provide traders with on-chain records of shorts placed on its sister platform Dumpy.fun, using a “squeeze explorer.”
This amounts to providing users with order flow from transactions on Dumpy.fun, which could change the nature of memecoin PvP trading.
PvP stands for “player versus player” and is the term used in the crypto industry to refer to the zero-sum nature of cryptocurrency trading that pits a handful of privileged insiders against a larger pool of investors hoping to back the next blockbuster token.
The memecoin cryptocurrency market is worth at least $40 billion, according to data from CoinGecko.
That figure is significantly lower than the $53 billion market size when Dumpy.fun launched three weeks ago, indicating the likely profitability of shorting memecoins.
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Yet reverse trading could prove profitable as a new branch of PvP warfare emerges — one that allows ardent supporters of a targeted memecoin to drum up interest and protect their investments from potential short sellers.
Memecoin cryptocurrencies have no known utility and are created to capitalize on the popularity of mimetic engagement within a community similar to the infamous GameStop short squeeze of 2021.
GME, the ticker symbol of retail gaming company GameStop, experienced a massive short squeeze in early 2021 that sent its price to a pre-market value of $500 per share, more than 30 times its value a month earlier.
Open Beta
Squeezy.lol will launch on August 27, but its counterpart platform Dumpy.fun has moved from its private testing phase to an open beta phase.
Users no longer need to subscribe to the waiting list and can instead start shorting memecoins on the platform.
Dumpy.fun started with support for a single memecoin, Catwifhat, a $19 million asset launched earlier this year. The platform now supports 11 memecoins and will soon enable permissionless token listings that allow traders to short newly created memecoins.
Osato Avan-Nomayo is our DeFi correspondent based in Nigeria. He covers DeFi and technology. To share tips or information on articles, please contact him at osato@dlnews.com.
