- Solana protocol for shorting memecoins launches a new market for opposing trade.
- The new platform could make short squeezes on Solana memecoins possible.
- Crypto’s memecoin market has lost $13 billion since July.
Solana protocol Dumpy.fun is launching a new feature that will turn its initial purpose ― shorting Solana memecoins ― on its head.
The new market called Squeezy.lol will allow users to take the other side of the trade and conceivably trigger short squeezes on heavily shorted memecoins.
Shorts refer to traders betting that the price of an asset will fall. Short squeezes, on the other hand, occur when the price of such an asset rises suddenly, forcing short bettors to either close their positions or buy the asset to limit their losses.
Squeezy.lol will provide traders with onchain records of shorts placed on its sister platform Dumpy.fun, using a so-called “squeeze explorer.”
That is akin to providing users with order flows of the trades on Dumpy.fun which could alter the nature of memecoin trading PvP.
PvP is short for player versus player and is the crypto industry’s term for the zero-sum nature of crypto trading that pits the handful of privileged insiders against a larger cast of investors hoping to back the next successful token.
Crypto’s memecoin market is worth at least $40 billion, according to data from CoinGecko.
That figure is significantly lower than the $53 billion size of the market when Dumpy.fun launched three weeks ago, indicating the likely profitability of shorting memecoins.
Still, the opposite trade could prove profitable as a new branch of the PvP wars emerges ― one that allows staunch backers of a targeted memecoin to rally interest and protect their investments from would-be short sellers.
Crypto memecoins have no known utility and are created to leverage the popularity of mimetic engagement within a community akin to the infamous GameStop short squeeze of 2021.
GME, the stock ticker for retail gaming company GameStop, famously experienced a massive short squeeze in early 2021 that caused its price to reach a premarket value of $500 per share, more than 30 times its value a month prior.
Open beta
Squeezy.lol will launch on Aug. 27 but its corresponding platform Dumpy.fun has moved from its private testing phase to an open beta stage.
Users no longer need to subscribe to the waitlist and instead can begin shorting memecoins on the platform.
Dumpy.fun began with support for only one memecoin, Catwifhat, a $19 million asset launched early this year. The platform now supports 11 memecoins and will soon enable permissionless token listings allowing traders to short newly created memecoins.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
