4 ms·

How do these scammers generate such big market caps for their coins? Offloading $1.4MM is a huge sum of money, more than 99.9% of people in the world would ever

by soared 1y ago

How do these scammers generate such big market caps for their coins? Offloading $1.4MM is a huge sum of money, more than 99.9% of people in the world would ever see at once.

jandrese 1y ago
Wash trades mostly, then it is just a matter of finding some suckers to bite before you pull the rug. $1.4M is a lot to you or me, but in the world of big money it is pocket change.
- rtkwe 1y ago
  How do wash trades work in a liquidity pool derived coin? Seems like the only way to boost the coin value is to put more 'real' coins into the LP and dump before someone else does after the pump attracts more suckers.
  - jandrese 1y ago
    You do need to put cash in, sometimes quite a bit--so when you see that someone ran away with $1.4M be skeptical because at least some of the money they stole was their own.
danielvf 1y ago
Market cap doesn't equal what people have purchased. See this classic from 2015: https://medium.com/signal-v-noise/press-release-basecamp-valuation-tops-100-billion-after-bold-vc-investment-c221d8f86ad7 https://medium.com/signal-v-noise/press-release-basecamp-val...
- rambambram 1y ago
  I remember this one! Already 10 years ago, wow.
- 0cf8612b2e1e 1y ago
  In order to determine the valuation of companies, Bhatnagar typically applies the following formula: [(Twitter followers x Facebook fans) + (# of employees x 1000)] x (total likes + daily page views) + (monthly burn rate x Google’s stock price)-squared and then doubles if it they’re mobile first or if the CEO has run a business into the ground before. Beautiful.
PKop 1y ago
Market cap is essentially meaningless as it can be computed after 1 transaction which tells you nothing what price will be at any significant volume.
kordlessagain 1y ago
> How do these scammers generate such big market caps for their coins? Faking one's own death, evidently.
nfriedly 1y ago
To calculate market cap, you take the most recent trade and multiply it by the total number of coins/shares/etc that exist. Since the number of coins is decided by the coin's creator, all they need to do is sell a single coin for a single cent to get whatever market cap they want. Furthermore, scammers often do "wash trades" where they set up two accounts and have one purchase from the other, for whatever price they feel like. So now they're making up both of the numbers that get multiplied to determine the market cap.

by soared 1y ago

How do these scammers generate such big market caps for their coins? Offloading $1.4MM is a huge sum of money, more than 99.9% of people in the world would ever see at once.

jandrese 1y ago

Wash trades mostly, then it is just a matter of finding some suckers to bite before you pull the rug. $1.4M is a lot to you or me, but in the world of big money it is pocket change.

rtkwe 1y ago
How do wash trades work in a liquidity pool derived coin? Seems like the only way to boost the coin value is to put more 'real' coins into the LP and dump before someone else does after the pump attracts more suckers.
- jandrese 1y ago
  You do need to put cash in, sometimes quite a bit--so when you see that someone ran away with $1.4M be skeptical because at least some of the money they stole was their own.

danielvf 1y ago

Market cap doesn't equal what people have purchased. See this classic from 2015: https://medium.com/signal-v-noise/press-release-basecamp-valuation-tops-100-billion-after-bold-vc-investment-c221d8f86ad7 https://medium.com/signal-v-noise/press-release-basecamp-val...

rambambram 1y ago
I remember this one! Already 10 years ago, wow.
0cf8612b2e1e 1y ago
In order to determine the valuation of companies, Bhatnagar typically applies the following formula: [(Twitter followers x Facebook fans) + (# of employees x 1000)] x (total likes + daily page views) + (monthly burn rate x Google’s stock price)-squared and then doubles if it they’re mobile first or if the CEO has run a business into the ground before. Beautiful.

PKop 1y ago

Market cap is essentially meaningless as it can be computed after 1 transaction which tells you nothing what price will be at any significant volume.

kordlessagain 1y ago

> How do these scammers generate such big market caps for their coins? Faking one's own death, evidently.

nfriedly 1y ago

To calculate market cap, you take the most recent trade and multiply it by the total number of coins/shares/etc that exist. Since the number of coins is decided by the coin's creator, all they need to do is sell a single coin for a single cent to get whatever market cap they want. Furthermore, scammers often do "wash trades" where they set up two accounts and have one purchase from the other, for whatever price they feel like. So now they're making up both of the numbers that get multiplied to determine the market cap.