Solana Trader Makes Huge Profits on New Memecoin, But Liquidity Woes Loom
A Solana (SOL) blockchain-based digital asset trader has sparked controversy after making a staggering 4,000% profit within just five hours. The rapid gain, achieved through the purchase of a newly launched memecoin called TORI, has triggered accusations of insider trading.
Trader Makes Massive Gains on TORI
Transaction data reveals that the trader invested approximately $49,000 (344 SOL) to acquire TORI shortly after its launch. The investor then proceeded to move the purchased TORI coins (261.4 million) to different addresses on April 28th. Within a mere five hours of trading, the value of the TORI tokens skyrocketed to a staggering $2.5 million.
Insider trading?
This guy turned $49K to $2M in just 5 hours, a gain of 41x!
He withdrew 345.6 $SOL($49K) from #Binance via 2 fresh wallets and spent 344 $SOL($49K) to buy 261.4M $TORI.
He transferred the 261.4M $TORI to multiple wallets without selling them.
Currently, the… pic.twitter.com/ENVBxzKHGH
— Lookonchain (@lookonchain) April 28, 2024
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Insider Trading Allegations Surface
The swift and significant price rise of TORI, coupled with the trader’s seemingly precise timing, has raised eyebrows within the cryptocurrency community. Some market participants suspect insider knowledge, questioning how the trader could have been so confident about TORI’s price surge, especially considering the saturated market for new memecoins.
Potential Liquidity Issues Cloud the Victory
Despite the impressive $2 million windfall, the trader might face difficulties in withdrawing their gains due to TORI’s limited liquidity. The purchase was made on Raydium, a Solana-based decentralized exchange (DEX). However, Raydium doesn’t fully recognize TORI, only identifying it through its mining address.
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Furthermore, the liquidity pool for swapping TORI on Raydium is shallow, containing only around $6,466 worth of SOL and 93.65 million TORI tokens. This limited liquidity makes it challenging for the trader to sell their entire TORI holdings without significantly impacting the token’s price, potentially causing it to plummet and erase all their gains.
Uncertainties Remain for the Trader
The story of this Solana trader highlights the potential rewards and risks associated with investing in newly launched memecoins. While the rapid price surge of TORI resulted in a significant profit, the trader’s ability to withdraw those gains remains uncertain due to the memecoin’s limited liquidity. This situation serves as a cautionary tale for investors considering similar ventures in the fast-paced and often unpredictable world of memecoin trading.
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