The team of VirtualVersions (VV) accused their market maker, Gotbit, after a failed listing. (https://unuslabs.notion.site/Comprehensive-FRAUD-Report-on-Our-Experience-with-GotBit-Hedge-Fund-e125a2a9d2fc4598891aac71a61c3aba)
Gotbit then responded to these accusations. (https://gotbit-mm.notion.site/gotbit-mm/Gotbit-VV-report-dd9e80a8574546909af0866b7efa4a9a) The "confrontation" turned out to be quite interesting, and I would like to summarize its outcomes, which undoubtedly indicate that it is currently advisable to refrain from investing in this project due to the team's major mistakes during the listing and their attempt to blame the market maker. Let's understand why:
- The CEO himself mentioned several times that the main focus should be on achieving KPIs for DAO Maker.
- Gotbit provided liquidity for the DEX (decentralized exchange).
- They provided anti-snipe measures for free, and $60k was spent to align the initial liquidity on the DEX with the current price on centralized exchanges (CEX) to avoid arbitrage.
- Gotbit also provided the funds for the initial buy pressure on the CEX, setting orders and walls themselves.
- VV only provided $250k, which went directly into the initial liquidity, and there were no funds left for the buyback.
- They were counting on making a profit from the cash-out, but the actual profit turned out to be lower. As a result, they deviated from their initial strategy of achieving KPIs, and the price plummeted because their funds ran out.
Additionally, the article highlighted a couple of amusing moments:
- An advisor attempted to sell their own tokens behind the project's back, even faster than the project itself.
- The project believed that Twitter influencers could generate a buy pressure during the listing.
- The final marketing move was also very strange. They decided to do an email campaign and expected much greater results than what this tool can actually deliver today.
In conclusion, the main takeaway is that the project was ruined by its own greed and strong belief in Twitter influencers who were supposed to provide the initial buy pressure. When that didn't happen, and KPIs had to be met in order not to lose the $200k they raised publicly, they started using funds from the cash-out, which quickly ran out (since no funds were allocated for the buyback, and the cash-out was weak). Consequently, there was no price support (due to lack of funds), and they blamed the poor market makers for drawing a bad chart.
In the end, it can be said that Gotbit lived up to their reputation, and the employees of the project themselves were responsible for the unsuccessful listing.
This case turned out to be illustrative and showed that not every bad chart and price drop are caused by a poor market maker, but more often it is simply the result of a greedy team. Show Less
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