A Solana protocol known for shorting memecoins is launching a new app that allows users to take long positions on heavily shorted tokens.
On August 20, the Dumpy.fun protocol, named after the successful Solana memecoin deployer pump.fun, announced the release of a new short-squeeze tool called “squeezy.lol” on August 27.
The platform described the new tool as ushering in a “new era of PVP,” referring to the player-versus-player trading style typical of memecoins.
Squeezy.lol will enable traders to “take the other side” of Dumpy.fun users by using a feature called the “squeeze explorer,” which identifies the most shorted memecoins. This tool will help investors spot heavily shorted assets and mobilize memecoin communities to initiate a “short squeeze”.
Dumpy.fun allows users to short Solana memecoins with small amounts of leverage, potentially offering profitable opportunities due to recent sharp declines in these tokens’ prices.
“Shorting” refers to betting that the price of an asset will fall, while a short squeeze occurs when the price of a heavily shorted asset rises rapidly, forcing short sellers to buy more of the asset to cover their positions.
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The 2021 GameStop incident is a notable example of a short squeeze, where retail traders drove up the stock price by over 1,500% in a month, forcing hedge funds to liquidate their positions.
Currently, Dumpy.fun supports 11 memecoins, including Dogwifhat (WIF), Wen (WEN) and Bonk (BONK), but plans to introduce permissionless listings for users to short newly created tokens.
Cre: cointelegraph.
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
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