This would do you great good in this crypto space.
LIVE
Cointelegraph
--
What Is Anti-dumping Policy in Crypto?
What is anti-dumping policy in crypto?
An anti-dumping policy is designed to safeguard crypto investors from pump-and-dump schemes.
The term “anti-dumping policy” refers to actions taken by project developers, communities or exchanges to prevent financial fraud where scammers sell their crypto when the price reaches a certain level to make enormous profits before exiting the market. After that, the price sharply drops, leaving other investors suffering heavy monetary losses. Anti-dumping policy is designed to beat this scam.
In the crypto context, anti-dumping differs from the traditional anti-dumping measures taken by governments to protect domestic industries from the impact of foreign imports. The government would impose protective tariffs on imported goods and services to level the playing field for domestic producers and save the home economy.
What is a pump-and-dump scheme in crypto?
A pump-and-dump scheme involves an organized entity or a group of individuals that artificially inflate a crypto token’s price and then sell off their holdings for a profit, leaving investors with losses.
Fraudsters pump the price artificially by disseminating misleading information about the token and orchestrating a demand for the token through coordinated buying.
In the hope of making a profit, unsuspecting investors pre-accumulate the asset at lower prices. The scammers then dump or sell off their holdings at inflated prices, triggering a dramatic collapse. While the perpetrators make a hefty profit, the other investors — who were led to believe in the asset’s potential due to the artificial hype — lose all their investments.
The orchestrators of pump-and-dump schemes take advantage of the largely unregulated cryptocurrency industry. They drive up the market sentiment around a scam token before cashing in on it, leaving other investors to lose their money and, often, their faith in the crypto ecosystem.
How does anti-dumping policy work?
Anti-dumping measures in crypto help protect investors by placing limits or fines on extensive token dumping or setting up a vesting period.
Anti-dumping regulations restrict buying or selling large quantities of tokens in one transaction, limit orders for the entire supply, apply value limitations or set up daily limits or price caps. Dumping is usually done by fraudulent investors who buy a large number of tokens to push up the prices substantially and sell these off for a hefty profit.
Here’s how anti-dumping policies work:
Buying and selling limitations
In the ever-changing cryptocurrency space, projects frequently put strategic controls in place to preserve token stability and deter market dumping. For instance, they incorporate buying and selling restrictions into the smart contract. These techniques are essential for long-term sustainability and investor trust since they lessen the risks brought on by price fluctuation.
Ethereum’s EIP-1559 update changed the fee market mechanism, burning a portion of transaction fees, which can reduce the overall supply over time, potentially increasing the value and reducing the incentive to dump.
By incentivizing node operators for their network participation, Chainlink lowers the likelihood of dumping by encouraging node operators to hang onto their Chainlink (LINK) tokens to continue collecting prospective rewards. According to a predetermined inflation schedule, a percentage of Solana’s inflation is designated for staking rewards. As a result, holders are encouraged to stake their tokens, which lowers the market’s liquid supply and deters dumping.
Token vesting
Token vesting entails locking freshly created or acquired tokens and releasing them after a predetermined time. Tokens granted to the founders and initial investors of a project typically vest over time.
This technique prevents the flooding of tokens into the market and prevents any attempts from the founders to make money quickly and then abandon the projects. Investors should take into account the vesting schedule of a project.
How can investors avoid pump-and-dump schemes?
Investors should conduct due diligence to select projects that create value and are transparent. They should avoid projects that promise quick riches.
To escape harm is usually the best way to deal with it. In cryptocurrency, investors need to be cautious, conduct adequate research before investing, and avoid projects that don’t look trustworthy.
Keep a vigilant oversight
Before investing in any project, investors should be mindful of the risk of dumping and proceed with caution. The investors should investigate the founders of the projects and their track record, reviewing the relevant documents to determine if there are warning signs.
Squid token is a good example of a pump-and-dump scheme where signs of fraud were evident. The token fell from $90 to $0.00079 in just minutes. Investigations showed that the creators of the token were nonexistent and anonymous. The website and documents related to the project, such as the white paper and supplementary materials, had many misspellings.
The warning signs indicated fraud, and if investors had been cautious, they could have avoided the scam. Some social media groups indicate a pump in the offing. Being active in these groups and understanding the warning signs may help prevent such fraud.
Ensure the project is audited
Comprehensive smart contract auditing helps prevent vulnerabilities in the code. Sufficient auditing underlines that a project is committed to security and safety protocols. Project owners with fraudulent intentions may deliberately leave vulnerabilities they can exploit later.
Anti-dumping measures are incorporated via smart contracts and are audited by a reputable auditor. There are chances that fraudsters haven’t yet implemented what they have been claiming. If a project is open-source, one can go through the relevant code to determine how it is working under the hood. If the investor lacks the technical know-how, they could take an auditor’s help.
Refrain from diving into FOMO
In the cryptocurrency arena, FOMO, or the “fear of missing out,” is a real worry. When the value of digital assets rises, many investors feel pressured to take advantage of the trend. This behavior sets off large price increases followed by subsequent sharp drops. For instance, The price of Bitcoin recently surpassed $70,000, driven by factors like the anticipated Bitcoin halving and spot Bitcoin exchange-traded fund approvals. Several investors may be gripped by FOMO, buy BTC at its peak, and end up taking a loss if the price drops later.
Investors should avoid making significant investments in little-known cryptocurrencies. In any case, investment shouldn’t be more than they can afford to lose.
Consider the Lindy effect
The Lindy effect is the concept that the older a non-perishable thing gets, such as a technology, the chances of its longevity increase. A technology or project that has existed for some time will have a higher chance of enduring and maintaining its relevance.
Investors might leverage the Lindy effect to evaluate the longevity and potential profitability of cryptocurrency and blockchain projects. If a blockchain project has already proven its durability over time, it’s more likely to stay operating and yield profits in the future.
On Friday, the crypto market experienced a downturn, slashing the global crypto market value by over 7% to $2.55 trillion. Other altcoins, including Bitcoin (#BTC) and Ethereum (#ETH) prices, also dropped, alongside #BNB, #XRP, and Cardano (ADA).
Despite the rise of meme coins in recent days, Dogecoin (#DOGE) and Shiba Inu (#SHIB) prices also saw heavy sell-offs, dropping by 12%. Investors and analysts foresaw the expected need for necessary pullbacks after the Bitcoin halving for the market to surge further.
1. Options Expiry on Friday: The expiry of 332,094 ETH options, with a total notional value of $1.24 billion, is expected, with a put-call ratio of 0.69. The maximum pain point is $3,550. Traders are particularly bullish on Ethereum, yet they made profits above the maximum pain point. ETH price rose to $3,748 after a 24-hour drop to $3,656.
2. Diminished Hope for Fed Rate Cuts: US Fed interest rate cuts will depend on new economic data such as inflation and unemployment, as stated by Jerome Powell in his testimony to Congress. Following higher CPI data earlier this week, high PPI, retail sales, and unemployment figures indicate higher inflation and resilience of the US economy. This provided more reasons for the Fed to likely postpone interest rate cuts until the end of the year. The likelihood of keeping interest rates steady in March and May is quite high.
3. Liquidation of Crypto Assets Due to Liquidity Purge: The crypto market lost over $680 billion in market value recently due to liquidations. According to Coinglass data, over 192,000 traders were liquidated in the past 24 hours, and the largest single liquidation order, worth $13.30 million, occurred in the BTC-USDT swap on the OKX crypto.
4. Slow Entry into Spot Bitcoin ETFs: Entries into the US Spot Bitcoin ETF dropped by 80.6% to $133 million due to weakening Wall Street sensitivity to new economic data, according to CoinOtag reports. It marked the lowest entry in the past eight trading days.
The issue with #Binance and the #FGN is like those days of Buhari's ban on Twitter, despite the ban virtually everyone was still using the platform through various VPN applications.
Likewise if this Tinubu's administration ban the access to #binance platform, we would still have access through same means.
Now that the #AltcoinRallies is unfolding, no one will stop me from investing in good coins.
Shiba Inu’s Lead Developer Contemplates 99.9% Token Supply Burn
It would take a well-planned and massive withdrawal of tokens from circulation.
In theory, SHIB tokens might become more valuable due to their increased scarcity.
Shytoshi Kusama, the chief developer of the Shiba Inu (SHIB) cryptocurrency project, recently issued a remark that has the whole community buzzing. Kusama has brought up the prospect of limiting the amount of Shiba Inu in circulation to as little as 0.1 percent of its present volume. Many people, including investors and fans of the cryptocurrency, are talking and speculating about this statement.
The current circulating quantity of SHIB is 580 trillion, and if this idea were to be implemented, it would cause a significant change. Kusama made the comment in reaction to a sardonic offer by an opponent to destroy 99.9% of SHIB tokens, maybe with the money from Shibarium service fees.
Tough Task
A large portion of the Shiba Inu community has responded favorably to Kusama’s audacious claim. Many SHIB enthusiasts are eagerly awaiting the possible burning of enormous quantities of tokens. Many members of the community share this optimistic outlook and would love to see the value of SHIB rise after drastic supply cuts.
Though difficult, Kusama certainly countered that it is not impossible to accomplish such a feat. But getting to that level of dramatic decrease isn’t easy. It would take a well-planned and massive withdrawal of tokens from circulation to burn up 99.9 percent of SHIB’s supply. Token burns have been executed by the SHIB development team before, although on a lesser scale.
In theory, SHIB tokens might become more valuable due to their increased scarcity as a result of a lower supply. According to CoinMarketCap, at the time of writing, SHIB is trading at $0.00001103, up 1.17% in the last 24 hours.
Highlighted Crypto News Today:
Turkey Taps Specialist for Central Bank’s Crypto Policy Committee
Découvrez les dernières actus sur les cryptos
⚡️ Prenez part aux dernières discussions sur les cryptos
💬 Interagissez avec vos créateur(trice)s préféré(e)s