Market Manipulation Tactics in Cryptocurrency Projects Highlighted by Synthetix Founder

According to BlockBeats, Kain Warwick, founder of Synthetix and Infinex, recently discussed the evolving strategies in cryptocurrency financing on social media. Warwick highlighted that during the ICO era, projects struggled to secure funding without agreements with multiple market makers, incurring monthly costs ranging from $50,000 to $300,000. These market-making agreements have since transformed into options structures, with some market makers manipulating markets through low float strategies. This involves shorting at the peak of the Token Generation Event (TGE), buying back at the bottom, and then executing options to sell off. Warwick pointed out that the low float model, popularized by figures like SBF, has further fueled these arbitrage strategies. A recent trend involves projects selling tokens at discounted rates to liquidity funds before the TGE, guiding market makers to pump prices in low float conditions and then sell off directly. DWF Labs reportedly employed similar tactics with Synthetix, purchasing tokens from the treasury to drive up prices before cashing out. Warwick cautioned that project teams have various methods to extract value from token buyers. He advised vigilance when large amounts of tokens are transferred to market makers, as they might be using investors as exit liquidity.