Original | Odaily Planet Daily
Author | How to be a husband
Recently, the Meme popularity in the Solana ecosystem has been rising, and many representative projects have emerged, such as Silly Dragon and Knob.
In particular, BONK, the first "dog" token in the Solana ecosystem, has risen nearly 180 times in the past two months. Its market value once exceeded 1 billion US dollars, ranking third in the Meme sector, second only to DOGE and SHIB, and has been successfully listed on the leading exchanges Coinbase and Binance.
Who is Gotbit, the market maker behind Bonk? In addition to BONK, what other projects does Gotbit provide market making services for? Based on market news and exchanges with participants in the market making industry, Odaily Planet Daily reveals the development history of Meme token market maker Gotbit and explores its market making strategy.
Gotbit, an active market maker, is passionate about Meme tokens
As early as the last bull market, Gotbit began to provide market maker services. However, since the team is mainly based in Europe and the projects are mainly European projects, it has a certain degree of popularity in Europe, but is not well-known in other regions. The surge in Bonk in recent months has really brought Gotbit into the public eye and has become a popular candidate for current project parties to choose market makers.
Traditional market makers mostly assist the supply and demand of tokens based on market sentiment. The rise of tokens has little to do with market makers, but mainly depends on major positive news of the project or bullish market sentiment. In the early days, Gotbit also tended to be a traditional market maker, mainly providing liquidity to the market, charging project parties corresponding fees and spreads during the transaction process.
Today, Gotbit adopts a more popular active market-making style, that is, the project party cooperates with the market maker to jointly earn profits in the secondary market, and the two redistribute the profits. This market-making style is to collect chips during the downturn of the project, and when the project is favorable or the market is rising, it will provide more support at key points, thereby assisting in "pulling the market" and shipping at high points.
Gotbit has paid special attention to Meme tokens this year, and the Meme token project must be real, which has been repeatedly emphasized by Gotbit founder and CEO Alex Andryunin. Based on past experience, it seems that Gotbit has been "cut" of 500 SOL tokens by an unknown Meme project.
Why is Gotbit so fond of Meme tokens? There are three reasons:
The rise of Meme tokens can easily cause FOMO sentiment in the market and attract retail investors;
Meme tokens are easy to catch the attention of others, such as Musk and Dogecoin;
Meme token does not have a strong opponent for Gotbit, after all, all project parties are teammates.
At present, in addition to Bonk, Gotbit also provides market making services for solana's reverse MEME token analos and Bonk's reverse Knob. Among them, analos has risen 3,800 times in less than a week, and Gotbit has also officially announced its investment in analos. It is self-evident; Knob just announced its cooperation with Gotbit yesterday, and the subsequent development can be expected.
However, the reviews of Gotbit on social media are mixed. On-chain detective ZachXBT once said that he would be wary of any project that cooperates with the market maker Gotbit Hedge Fund, and disclosed a report. According to the pictures shared by ZachXBT, Gotbit's trading methods can be seen:
In the first few minutes of the price discovery phase, push the price up 10x to create FOMO and accumulate as much buying power as possible to reach the limit and sell the tokens in large quantities in the subsequent pump;
During the first 12 trading hours, the goal is to take advantage of existing arbitrage opportunities, focusing on making a significant profit quickly;
The target trading volume on the launch day is more than $50 million, generated on CEX for free through the transaction generation system;
Reaching 20x ATH within the first peak on the launch day and 25x ATH within the first month of trading.
The materials provided by ZachXBT can confirm the active market-making style mentioned above from a certain perspective. The market-making strategy provided by Gotbit to the project party tends to be based on profit, by raising the price of the currency and selling at a high point.
Gotbit’s market-making style is sweeping the crypto market
Odaily Planet Daily found in its communication with market makers that there are more and more market makers with active market making style similar to Gotbit.
Market makers are generally divided into three categories:
Passive market makers help project parties provide liquidity. Most market making strategies are loan+call option (borrowing coins from project parties + call options). They are more applicable in market stages with sufficient liquidity. Representatives include GSR and Wintermute.
Market makers are between passive and active, that is, they conduct OTC to get low-priced coins in the name of investment, and then sell them in the secondary market. This type of market maker is particularly active in the bear market, and DWF is a representative example.
Active market makers, that is, they cooperate with the project party to make the market according to their actual situation. They usually intervene before listing on the exchange and earn profits in the secondary market. The two parties then distribute the profits. The representative is Gotbit.
Market makers like DWF have a very distinct market making style. Currently, DWF’s market making strategy has gradually become known to the public, and most on-chain data analysts have also disclosed the whereabouts of DWF’s tokens on the X platform.
The rise of active market making style is influenced to a certain extent by DWF, which is more conducive to market makers to improve their marginal benefits. In addition, projects with a small market value or those that have not yet issued coins are more willing to cooperate with such market makers. The increase in coin prices will bring more attention to the project and increase the popularity of the project.
However, the strategy of active market makers is that the short-term rise of a certain token will trigger a lot of FOMO emotions among investors, leading to rash trading behaviors. Odaily Planet Daily reminds investors to invest rationally and not blindly chase the rise.
