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Glossary

Anti-dump/Anti-Dumping Policy

November 21, 2023 - Around 3 mins mins to read

An anti-dumping policy is a set of regulations implemented to safeguard investors against pump and dump schemes in the blockchain market. Pump and dump schemes occur when a large investor, commonly known as a whale, manipulates the price of a token by artificially inflating it and then selling off their holdings for significant profits. This can lead to massive losses for other investors who are unable to sell their tokens at the inflated prices. In response to these fraudulent activities, the concept of anti-dumping policies was introduced.

A prime example that highlights the importance of an anti-dumping policy is the case of the SQUID token. Initially valued at only $0.01, the price of SQUID skyrocketed due to pump and dump activities. However, due to various policies, including the implementation of an anti-dumping policy, investors were unable to sell their tokens, resulting in huge losses. The price of the token eventually plummeted from $2,856 to $0.00079 within minutes, leaving many investors devastated.

Fortunately, not all tokens operate in such a volatile manner. Some tokens, like THUNDERCAKE and DrunkDoge, have implemented anti-dumping protection measures to safeguard their investors.

THUNDERCAKE, for instance, has implemented restrictions to prevent large-scale dumping. It ensures that more than 0.1 percent of its total supply cannot be sold, which prevents whales from quickly selling off their holdings and causing massive price drops. Additionally, buy orders for THUNDERCAKE tokens are limited to 0.5 percent of the entire supply, further protecting against market manipulation.

Similarly, DrunkDoge controls price volatility by imposing restrictions on whales. It limits their ability to buy or sell large amounts of tokens in a single transaction. The platform has an anti-dumping mechanism that enforces a cooling-off period of 1, 2, or 6 hours, depending on the transaction volume. Furthermore, taxes are increased after each sale to discourage excessive dumping of the currency.

Aside from anti-dumping policies, there are other measures in place to protect investors in the blockchain market, such as buyback programs. Companies often implement buyback policies to reduce the number of tokens in circulation over time, with the goal of increasing token values, generating speculation, and creating hype.

Several prominent blockchain projects, including Binance and Nexo, have conducted buybacks. For example, Nexo initiated a buyback program after the core development team noticed a decline in the value of their asset. By limiting the number of project tokens in circulation, they were able to improve the market price, benefiting investors.

During a token price surge, it may be tempting to invest or try your luck like everyone else. However, it is crucial for investors to adhere to certain guidelines to protect themselves:

  • Pay attention to social media groups that provide free signals indicating an upcoming pump. This could be an indicator of a pump and dump scheme, where some group members may be orchestrating the pump to take advantage of unsuspecting investors.
  • Seek financial advice from experts or conduct thorough research to make informed investment decisions. Be cautious of influencers who rarely discuss cryptocurrencies but suddenly start promoting a particular token. Their intentions may not align with your best interests.
  • Only invest an amount that you can afford to lose. While it is possible to profit from a pump and dump if the timing is right, it is advisable to anticipate potential risks that could result in the loss of your investment.

By understanding and following these guidelines, investors can protect themselves from falling victim to pump and dump schemes and make more informed decisions in the blockchain market.

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Coincu

Glossary

Anti-dump/Anti-Dumping Policy

An anti-dumping policy is a set of regulations implemented to safeguard investors against pump and dump schemes in the blockchain market. Pump and dump schemes occur when a large investor, commonly known as a whale, manipulates the price of a token by artificially inflating it and then selling off their holdings for significant profits. This can lead to massive losses for other investors who are unable to sell their tokens at the inflated prices. In response to these fraudulent activities, the concept of anti-dumping policies was introduced.

A prime example that highlights the importance of an anti-dumping policy is the case of the SQUID token. Initially valued at only $0.01, the price of SQUID skyrocketed due to pump and dump activities. However, due to various policies, including the implementation of an anti-dumping policy, investors were unable to sell their tokens, resulting in huge losses. The price of the token eventually plummeted from $2,856 to $0.00079 within minutes, leaving many investors devastated.

Fortunately, not all tokens operate in such a volatile manner. Some tokens, like THUNDERCAKE and DrunkDoge, have implemented anti-dumping protection measures to safeguard their investors.

THUNDERCAKE, for instance, has implemented restrictions to prevent large-scale dumping. It ensures that more than 0.1 percent of its total supply cannot be sold, which prevents whales from quickly selling off their holdings and causing massive price drops. Additionally, buy orders for THUNDERCAKE tokens are limited to 0.5 percent of the entire supply, further protecting against market manipulation.

Similarly, DrunkDoge controls price volatility by imposing restrictions on whales. It limits their ability to buy or sell large amounts of tokens in a single transaction. The platform has an anti-dumping mechanism that enforces a cooling-off period of 1, 2, or 6 hours, depending on the transaction volume. Furthermore, taxes are increased after each sale to discourage excessive dumping of the currency.

Aside from anti-dumping policies, there are other measures in place to protect investors in the blockchain market, such as buyback programs. Companies often implement buyback policies to reduce the number of tokens in circulation over time, with the goal of increasing token values, generating speculation, and creating hype.

Several prominent blockchain projects, including Binance and Nexo, have conducted buybacks. For example, Nexo initiated a buyback program after the core development team noticed a decline in the value of their asset. By limiting the number of project tokens in circulation, they were able to improve the market price, benefiting investors.

During a token price surge, it may be tempting to invest or try your luck like everyone else. However, it is crucial for investors to adhere to certain guidelines to protect themselves:

  • Pay attention to social media groups that provide free signals indicating an upcoming pump. This could be an indicator of a pump and dump scheme, where some group members may be orchestrating the pump to take advantage of unsuspecting investors.
  • Seek financial advice from experts or conduct thorough research to make informed investment decisions. Be cautious of influencers who rarely discuss cryptocurrencies but suddenly start promoting a particular token. Their intentions may not align with your best interests.
  • Only invest an amount that you can afford to lose. While it is possible to profit from a pump and dump if the timing is right, it is advisable to anticipate potential risks that could result in the loss of your investment.

By understanding and following these guidelines, investors can protect themselves from falling victim to pump and dump schemes and make more informed decisions in the blockchain market.

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