Benchmarking Pump.fun? Solend changed its name and launched the Meme coin short-selling platform dumpy.fun How to play
Original title: "Interpretation of dumpy.fun: Solend's new product after the name change allows shorting of Meme coins to make PVP more intense"
Original source: TechFlow
Project name change is a common phenomenon in the currency circle, but it is generally an adjustment in brand and communication.
But it is not common to change the name and create a new product.
Yesterday, Solend, a well-known lending protocol on Solana, changed its name to Save, which literally means safer. But the new product it brought makes people smell a hint of danger and excitement.
In addition to the newly introduced SUSD and SaveSOL assets, Solend also created a platform that allows shorting Meme coins --- dumpy.fun (X: @dumpydotfun).
The meaning of this name is self-evident. Previously, there was Pump.fun, which started a long carnival of randomly posting Memes; and this dumpy.fun, obviously wants to form a contrast, shorting Meme coins to start an airdrop carnival.
Solend (now Save) wrote in the blog introduction about dumpy.fun:
"Memecoin has reached a fever pitch, but money grabs and arbitrage are hurting the community. dumpy.fun is a platform for shorting memecoin, which users can use to profit from corrections. It leverages the deepest on-chain liquidity and is a better alternative to perpetual contracts. dumpy.fun is powered by Save."
Since the product has not yet been officially launched, we also flipped through the product design white paper to see what shorting Meme coins is all about in advance.
Designing shorting with the on-chain contract DEX model
"What goes up, must come down"--- Newton.
Dumpy.fun’s white paper begins with this classic gravity theory to satirize that Meme coin will eventually return to zero, so it took advantage of the situation to create a platform dumpy.fun that can short Meme coin.
Platform nature:It is not a traditional DEX (decentralized exchange). It is more like a financial instrument platform dedicated to short selling, combining lending and trading functions.
Operation principle:
dumpy.fun uses other platforms (such as Solend, hereinafter referred to as Save) for lending operations. The lending business itself is also Save's main business.
Then token swaps are performed through Jupiter.
This combination design allows users to short sell without directly holding assets.
However, since it is an all-chain behavior, where does the money to support short selling come from?
The answer given by dumpy.fun is to use the funds of depositors on Save and increase the deposit interest rate on its new platform to attract users to deposit.
The interest rate income that convinces them to deposit comes from:
· Interest paid by borrowers: Short sellers need to pay interest to borrow assets.
· Transaction fees: The platform may extract a certain percentage of the transaction.
· Liquidation fees: When short sellers are liquidated, part of the liquidation fees may be allocated to depositors.
· Perhaps the following example can help you understand the design of dumpy.fun more quickly:
Suppose we want to short WIF.
Step 1: Deposit collateral
You deposit 100 USDC as collateral.
Step 2: Borrow WIF
The platform helps you borrow WIF tokens worth 100 USDC (from Save, or from dumpy.fun's own fund pool). Assuming the current WIF price is 1 USDC, you have borrowed 100 WIF.
Step 3: Sell the borrowed WIF
The platform immediately sells these 100 WIF on the market and gets 100 USDC.
The current situation is:
You owe the platform 100 WIF;
The platform has your 100 USDC collateral and 100 USDC from selling WIF.
Step 4: Wait for price changes
Suppose the price of WIF drops by 50%, and now 1 WIF is only worth 0.5 USDC.
Step 5: Close the position
You decide to close the position. The platform uses 50 USDC of the 100 USDC in hand to buy 100 WIF in the market (because 1 WIF is only worth 0.5 USDC now).
Step 6: Repayment and Settlement
The platform uses the 100 WIFs it bought to repay the 100 WIFs you borrowed previously;
The remaining 50 USDC is your profit;
The platform returns the 100 USDC collateral you originally deposited.
Final result:
You made a profit of 50 USDC;
Your original 100 USDC collateral is safely returned;
The benefit of dumpy.fun is that it automates this process, and you don’t need to perform each step manually; and it combines multiple platforms (such as Save lending and Jupiter trading) to achieve this function. .
PVP is heating up, and it is hard to predict life and death if you open a single contract
If most local dogs are destined to return to zero, then wouldn’t you be making a lot of money by shorting?
dumpy.fun obviously does not support this idea, and it may want a more intense PVP game.
In contrast, the platform also provides a "Squeeze Explorer" interface that can display the liquidation threshold of short positions.
For those who are not familiar with contracts, a squeeze refers to the phenomenon that when the price of a heavily shorted asset suddenly rises, the short seller has to quickly buy the asset to close the position, thereby further pushing up the price.
This design is equivalent to showing everyone the current short positions and the funds needed to beat the shorts.
So if you are a long or a strong dealer, optimistic about a certain Meme coin, but find that there is a certain amount of funds in the market that are shorting. You can obviously calculate and buy in the opposite way to push up the price of Meme to beat the shorts.
In the case of dumpy.fun:
· If a large number of users short a Meme coin (such as WIF).
· And other users (perhaps by checking the "short squeeze browser") decide to buy this coin collectively.
· It may cause a similar short squeeze situation, causing the token price to rise rapidly.
· Short sellers may face huge losses, while buyers who push the squeeze may gain considerable gains.
Obviously, it is not feasible to open a short position without thinking. Dumpy's browser is to hope that the long and short sides will have a more intense game.
Open a single for a laugh, and life and death are unpredictable.
With the short-selling mechanism, the PVP of Meme coins will be more intense and even cruel.
Dumpy's own tweet also confirms this:
"Next time someone says your coin is bad, tell them to vote with their money."
This obviously has a bit of the meaning of a master of fanning the flames--- If you don't like meme, don't talk big, open a short position. The subtext is that I am going to set up a game to see whether you shorts are stronger or longs are stronger.
But there is one thing you and I both know:
It is hard to guess the winner of the finger-guessing game on the stage, but it is a sure win for those who set up the stage and collect the platform fee.
DUMP, the platform currency
With the launch of the platform, it will also have its own token DUMP.
Main functions:
a) Governance rights: Holders can participate in the decision-making process of the platform.
b) Fee sharing: A portion of the transaction fees and liquidation fees generated by the platform will be allocated to DUMP holders. This creates a passive income stream and incentivizes long-term holding.
c) Collateral: DUMP can be used as collateral for trading or lending on the platform. This increases the utility and demand for the token.
d) Liquidity mining: Additional DUMP tokens can be earned by providing liquidity. This helps increase the liquidity and stability of the platform.
The platform may implement a token buyback and destruction mechanism. A portion of the transaction fees may be used to buy back and destroy DUMP, creating deflationary pressure.
However, the product is not yet online, and DUMP has not yet TGE.
The dumpy official website currently only has the function of filling in an email to join the waiting queue. At the same time, interested players can visit the project's tg for more information.
Currently in the official Telegram community, the platform has launched a meme coin vote to let everyone decide which coins will be online and allowed to be shorted.
Again, it is fun to buy Meme, and it is also fun to short Meme.
I hope you are not the source of happiness for others.
Original link
欢迎加入律动 BlockBeats 官方社群:
Telegram 订阅群: https://t.me/theblockbeats
Telegram 交流群: https://t.me/BlockBeats_App
Twitter 官方账号: https://twitter.com/BlockBeatsAsia
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Tether invests $775 million in Rumble
Dogecoin drops over 30% from its yearly high of $0.48
Mo Shaikh steps down as CEO of Aptos Labs
MetaMask users can now stake EOS coins