As it hit the top, it was smashed. Has Gotbit changed from a Meme wealth code to a "danger signal"?

At the end of 2022, BONK, the first meme currency on the Solana chain, was launched, and it continued to rise nearly 40 times amid skepticism. In addition to the attractiveness of BONKs own meme narrative, Gotbit, the market maker behind it, is also one of the main factors driving BONKs rise. It has helped BONKs market value increase from 10 million to 2 billion.

As a CEX and DEX market maker, Gotbit has been committed to the cryptocurrency market since its inception, managing capital in decentralized assets. Gotbit has been making markets for memes since late last year. If you participated in the Solana reversal meme trend at the end of the year, you must remember that ANALOS increased 3,700 times in 5 days, and the market maker behind it was Gotbit.

Related Reading:ANALOS 3700 times a week, the reversal meme trend is sweeping Solana》

Although the most popular project in Gotbits market making is undoubtedly BONK, ANALOS undoubtedly allows Gotbit to serve as the wealth password for playing memes. Gotbit officials even directly called the community to ask Whos next? Nowadays, meme hype continues, and Gotbit is still making markets for various meme projects. YE and CP are two of the projects it announced cooperation with in the past week.

After getting market making from Gotbit, YE and CP opened with gratifying gains, but they were quickly smashed after the high point, which was suspected to be a rug. Subsequently, community members pointed out that YE, which was cooperating with Gotbit, seemed to be a fake contract. On-chain detective ZachXBT tweeted that both YE and CP were scammer projects. Gotbit did not have any extra explanation for this, but chose to delete the cooperation tweet directly.

From meme wealth code to danger flag?

On December 20 last year, Solana announced the contract for the reverse meme ANALOS. Three days later, Gotbit officially announced its cooperation with analoS and stated that it already holds ANALOS. Gotbit provided ANALOS with US$10 million in market making funds, allowing its market value to exceed US$150 million from US$40,000 at the beginning, an increase of more than 3,700 times in just 5 days. At the same time, Gotbit also hinted that it will assist ANALOS in listing on CEX, and even replicate BONKs development path.

Subsequently, Gotbit seems to have become widely active in the meme community. The official Twitter account will actively ask the community about the next project they hope to cooperate with. For a time, Gotbit became the wealth password for retail investors to invest in memes, also known as the meme DWF.

The community asked, is Gotbit’s choice of cooperation projects a bit blind? We can look at the subsequent development of ANALOS. After only 2 weeks of cooperation with Gotbit, the market value of ANALOS began to plummet to US$19 million after reaching a peak of US$150 million, and has not improved since then. After some community members used the Bonk robot to purchase ANALOS, they found that the token symbol name was displayed as Null instead of ANALOS.

After checking the ANALOS contract, it was found that the top 10 holders who purchased ANALOS made a combined profit of over $7 million. It seems that this team holds 50% of the supply, which is a very dangerous sell signal. In addition, unlike the initially announced LP is permanently locked and tokens are 100% destroyed, the ownership holder address of ANALOS holds 21% of the supply, and LP is subsequently unlocked. On top of that, their metadata is mutable, which means they can change the transaction history and even wallet addresses selling and buying can be hidden.

At this time, the community began to realize that something was wrong, and some people began to accuse Gotbit of being a liar. However, Gotbit still has not improved. In subsequent cooperation, there are still many memes that have rugs, such as SOMBRERO, MACHO, SIMBA, etc. Even the meme EOS that won the meme competition organized by Gotbit also has rugs.

Pulling the market creates FOMO, and it will crash when it reaches the top

In fact, judging from the establishment of Gotbit, its initial market-making method was sufficiently fraudulent.

Alexey Andryunin founded Gotbit with his undergraduate classmates in 2018, when ICOs were popular. While it would cost $8,000 for a cryptocurrency to be listed on a small exchange, supporting fake trading volume through algorithms that mimic normal market activity would cost $6,000 a month. Gotbit plans to charge fees to inflate the trading volume of unknown cryptocurrency exchanges.

To achieve this, a project needs to be listed on two small exchanges. During this process, Andryunin was responsible for contacting token projects to sell Gotbit’s “market making” services. In order to display fictitious trading volumes, his partners coded the trading bot to fill the order books of small trading platforms with extremely low trading volumes and close orders themselves using the same or another account to exchange tokens with each other. , to create the illusion of an active market so that assets can be listed on CoinMarketCap.

Once the token is listed, Gotbit exits the market, leaving other intermediaries to complete the final step. According to an article from coindeskarticlepointed out that there are 300 to 500 projects on CoinMarketCap belonging to Gotbit customers. Alexey Andryunin said trading platforms were aware of the manipulation but had no intention of stopping it.

Last September, Gotbit’s market-making strategy wasGive waycome out.

According to the report, “In the first few minutes of the price discovery phase, we will push the price up to 10x to create FOMO and accumulate as much buying power as possible to reach the extreme and sell the largest tokens at the peak; in the first 12 During trading hours, when the market is not fully connected, we aim to take advantage of existing arbitrage opportunities and will focus on making quick but substantial profits; on launch day, we aim to have a daily trading volume greater than 500 For tens of thousands of projects, most of the trading volume will be generated for free on CEX through our trading volume generation system.”

According to this strategy, Gotbits market-making policy will be divided into three phased goals. The positive situation is to consider reaching 20 times at the first peak after the opening, and to reach 25 times within a month.

@oleg_fem believes that these services exist because some trading platforms try to require projects to provide not only a minimum trading volume, but also a minimum number of traders, while implicitly allowing market makers to participate. Therefore, if the trading platform fails to provide traders and trading volumes, the project’s only recourse is to perform wash trades.

Although many memes among Gotbits cooperative projects have been listed on Kucoin, Bybit, Crypto.com, and even projects are listed on Binance, and some retail investors have indeed made money by investing in memes such as DUKO, PENG, SOLAMA, MYRO, and BONK. millions of dollars. But it is undeniable that Gotbit’s market-making fake contract meme and the existence of more than one rug project have greatly weakened the community’s trust in it.