Trader 0xSun: The Rally Mechanism of JINQIAN and FAMI Differs from Typical On-Chain Stock Short Squeeze Logic

Odaily News: Trader 0xSun posted on X platform, stating that under normal circumstances, the logic of an on-chain stock short squeeze generally includes: Robinhood or other compliant issuers issuing tokenized stocks on-chain that are pegged to real stock prices; a certain Meme coin paired with the tokenized stock; retail investors who do not hold the tokenized stock buying the Meme coin, driving up the price of the tokenized stock serving as the underlying asset of the liquidity pool; market makers buying the underlying stock due to arbitrage opportunities, converting and minting it into on-chain tokenized stock, thereby re-pegging the price; the market makers' purchase of the underlying stock may push up its price, thereby triggering a short squeeze.

0xSun stated that the case of JINQIAN/FAMI is not so: an unknown project party issued the FAMI token on-chain and retained minting authority, leaving compliance uncertain and the liquidity pool potentially unlocked; if the issuer is not a compliant RWA issuer, FAMI is essentially just an on-chain token sharing the same name. The project issued the Meme coin JINQIAN and paired it with FAMI, with a relatively large liquidity pool. Given FAMI's extremely low market capitalization, it sparked on-chain sentiment, leading retail investors to frantically buy JINQIAN, which in turn drove up FAMI as the underlying pool asset. Some retail investors went a step further, directly buying FAMI's underlying stock, causing the stock price to rise.

He noted that this situation is somewhat similar to Bald, an early Meme coin on Base, which also had an unlocked liquidity pool but saw aggressive price pumping, ultimately ending with the developer pulling the liquidity. In hindsight, there was no deterministic logic throughout the entire process. In such cases, one can only judge for oneself whether the probability of rising without wrongdoing is higher, or the probability of going to zero through malicious actions is greater. In fact, almost all trading scenarios are like this—whenever there is excess return, there is no 100% certainty. For most people, such projects carry extremely low certainty, but correspondingly, they may also offer potential returns of dozens of times.