The voices of the industry have warned that the president endorsed by cryptocurrencies should adopt stronger investor protection and liquidity care to prevent another major collapse in the market.
The investor’s sentiment remains shaken after the Libra (Libra) token, sponsored by Argentine President Javier Milei, suffered a $ 4 billion market cap wipeout due to insider cash-outs.
According to the blockchain analytics firm DWF Labs, at least eight insider Wallets retreated $ 107 million in liquidityCraving a huge collapse.
Source: Kobeissi Letter
To avoid a similar meltdown, tokens with the President’s endorsement will need a more stable safety and economic mechanism, such as locking of liquidity or making tokens in the liquidity pool that cannot be purchased for a predetermined period, DWF labs have written a report shared with cointelegraph.
The report said tokens from high-profile leaders would also need to launch restrictions to limit participation from crypto sniping bots and large holders or whales.
“Limiting bot and whale activity is essential to limiting the impact of individuals acting on insider information to corner a large percentage of token supply,” said Andrei Grachev, managing the DWF Labs partner:
“Projects should strive to be delivered as fair as a launch as much as possible so that all participants have an equal opportunity to secure a dedication and not be hurt by a small fund or well-funded players who say the lion’s part of the supply.”
Source: DWF Labs
Libra’s scandal resulted in around 74,698 merchants who lost a combined -with $ 286 million worth of capital, according to a DWF Labs’ report.
The rapid melting of the token further describes the need for liquidity, which “ensures that there is enough liquidity to buy and sell users without high slipping,” said Grachev, added:
“This is particularly important during the launch of a token when there is high volatility, ensuring that there is enough liquidity to satisfy large trade without the main price effect.”
The DWF Labs’ Report will come a week after New York lawmakers have introduced The law aimed at protecting crypto investors from rug pulls and insider fraud after the latest wave of memecoin scams.
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Many more transparency required for token launch
The meltdown of the Libra token describes the need for clearer token launch mechanisms, explained DWF Labs’ Grachev, addition:
“This includes pre-launch wallet transparency and launchpads that perform and better diligence in projects.”
“There is always a level of risk when launching any token, something that is not easy to relieve,” he said.
“However, by carefully examining the projects they have accompanied and taking advantage of the transparency that is one of the main features of the blockchain, launchpads can empower users to make more decisions,” he added.
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More stressful development has emerged since the melt of Memecoin sponsored by the President of Argentine, including that Libra is an “open secret” In some Memecoin circles that know about the launch of the token up to two weeks in advance.
Milei asked the anti-corruption office to investigate all members of the government, including the President himself, for potential misconduct, According to In a February 16 x statement issued by the office of the Argentina President, Oficina Del President.
Milei is faced with impeachment calls From his political opponents after endorsement the cryptocurrency became a $ 100 million rug pulling.
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