Crypto Rotator Sagas
Thesis:
With AML & KYC concerns sweeping the Crypto space, governments are targeting CEXs and known DeFi projects. The top of the list seems to be Binance and the golden ticket seems to be FTX in response. But the truth is a little more sinister than one would think, up front. But to cut to the chase, it appears that the big players are making a move to consolidate liquidity, wall it off and extract it from the DEX & DeFi world. Their method is the Rotator Effect, moving capital from the masses to elite. Below are several examples.
Central Exchange FUD:
Binance is the first target, FUD has been generated globally around this exchange and governments are more than happy to jump on board for some easy revenue. With governments struggling to bring in tax revenue, Crypto is being targeted…and the Crypto sphere is serving up Binance on the plater to every government regulatory god that is interested in making a fast buck. They are using the AML & KYC as the dagger to break up the little folks, lock their money up and make it harder for them to on-ramp or get access to funds after a period of time. Clearly, this is huge, and being orchestrated by a cabal of other CEXs, is what it first looks like. I mean, Binance has the largest order books in the world for Crypto, and that means the largest profits as well.
Other CEXs are also targets, like Coinbase all have issues, just review their support pages.
The other narrative being talked about is that CEXs are bad, Binance is being held up to show you this issue with custody, access during drops, support…
But it looks like there was only supposed to be one winner of this Binance FUD, our clue is coming from the CT and YouTube Crypto Influencers. What are they doing you ask, well they are dropping BNB and shifting their narrative over to touting the virtues of other chains with no reference to BSC anymore and hinting that LUNA, SOL, AVAX, COMOS and other L2s like Polygon are the future.
So who is the winner you ask, well its FTX/FTT! It's the new shining light that has done everything right. It's building a compliant system for the institutions to use, its making all the right moves, getting into NFTs, building gaming, partnering with all the right things…everything is being done perfectly. Well, whoever is orchestrating this is doing quite well, their goal is to shift liquidity out of Binance, its BSC environments and other CEXs like Coinbase to give everyone the bright perfect Crypto environment that everyone should shift to and that is FTT as the perfect place to park that cash/Liquidity/Capital!
But everyone says DeFi will protect us from the institutions and the big CEXs.
There is a key item that could bring down the decentralized world and our DEXs and DeFi applications to run smoothly for traders and investors. That is liquidity, there is a reason Uniswap took off, it's because of the liquidity found within its V2 and recently V3 AMM mechanisms. Other DeFi platforms, like Curve because of the amount of stable tokens earning yield, can drastically reduce fees due to its liquidity. (Balancer, CRV, MakerDAO, AAVE…) But what happens when there is a price imbalance or arbitrage opportunity?
Miner Extractable Value (MEV)
Arbitrage bots exist in the traditional finance world and exist on the blockchain today. Their main function is to maintain or balance prices across CEXs, DEXs and DeFi. Projects like Keep3r, ROOK, MakerDAO, all do arbitrage not only using a single token, but multiple tokens, earning capital from the price differences. But what if all this FUD around AML & KYC on the CEXs, that normally welcomed DEX or DeFi actively are now walled off? They can do it with specific technical countermeasures, like geo-fencing IPs and requiring valid/approved KYC before activity can take place. A more sinister method could be to make it look like a bug or API issue, a misconfiguration. The other aspect is that MEV is being looked at as bad, so I fully expect a wave of anti-bot FUD centered around Front-running and sandwich attacks being highlighted.
But I know you are asking yourself, where is the juicy part, and how are they going to extract liquidity out of the DEXs and DeFi? Easy, now with the CEXs walled off, user onboarding is being driven through them for mass adoption, huge price swings will start to happen between tokens on CEXs and DEXs. But with the DeFi world unable to leverage their bots to take advantage, the whales will be able to come in and pump and dump tokens at will. Until all the liquidity or massive amounts of it is off the DeFi platforms like Uniswap.
A crazy thing to think about is that meme tokens with locked liquidity will be harder to pump and dump fully and, with their counter whale technology embedded in this area, could be a bastion of hope.
Understand the Threats
Who else are the whales? VCs? Top VCs…their top projects. What do they look like? Where do VC get their $?
Tokenomics
Tell me what’s wrong with these Tokenomics?
How much did the public get compared to the team, VCs, etc…78% while the public only got 2%?
The public got access to 0.83% at IDO, the chances of earning much of the 33% reward pool are small, with pre-sale nearly 15X more…
This is a better opportunity, with an Airdrop, but still the community only gets 1%…when looking into a project like this, you would need to know how the Airdrop was distributed. Then we look at CoinGecko or CoinMarketCap for the current circulating supply and max supply…
This tells us that 1/5 of the tokens are in the wild, you would need to look back at their Tokenomics to determine the % of each category to determine your risk of new tokens being released…as this indicates selling pressure.
They wield Tokenomics against us…VCs, 50–70% or more is held back, releases with less than 1-10% of total supply…really tells you who is making out on this project…it's not you! Choose wisely…
Casio
The Casio of Crypto is getting more immersive, more engaging, more alluring than ever before…we are building a better mousetrap for ourselves and GameFi will be the nail in the coffin as your entire life will be tracked and monetized…thinking ownership of in game assets through NFTs will bring you wealth. Instead, you are locking up your wealth in illiquid assets, that in very rare instances, to turn liquid again, you will need to drop to basement level prices.
Price Manipulation
Another method or the Rotator Effect, is when the whales pump a token and then dump it. This can be done with high frequency trading concepts, flash loans or over several weeks or months, like with the big two BTC and ETH.
Thesis: BTC is being artificially held down IOT to allow the rest of the money bags time to get in at near the floor now. Once we have a ballast, BTC will go exponentially higher (it’s why we see crazy estimates, that we don’t believe at $700–900K this cycle).
Manipulation is not as hard as you would think.
Interviewed below…
They are setting up a pump and dump scenario to push the remaining holders out of the market, thinking BTC hit the top…once they have extracted the maximum at each level, up to $1M. Then exponential growth will kick-in to $10–20M a token…regardless, this is the BTC plan.
BTC accumulation chart shows whales buying in the dips and selling into the pumps…then FUD, rattles the new entrants, liquidations and the market comes down. Whales accumulate more and repeat on smaller or longer time frames.
Any BTC left in the wild is being targeted by mega corps aka whales through the guise of mass adoption acceptance. Paypal and Robinhood are more like pay-walls than access for all. Every company offering the service to accept BTC like Tesla is basically farming BTC from the masses and will earn not only USD appreciation (guaranteed with stimulus printing the Trillions for years to come) but the increase in value of BTC as well in the long run.
This manipulation can’t be done just with technical analysis or news…you need to be able to push the idea out to the community quickly. So to get an idea of what the next stage should look like, we turn to influencers and understand what they are telling us.
Current Message: The influencer drum beat is centered around 100–200K tops, so expect a huge correction, or a market fake-out. Either way, the moves will be designed to separate you from your tokens.
Liquidity Extraction at Global Levels
So what is the future, I see old school yield extraction methods being employed and wrapped into the Crypto world on a scale we have never seen before. The catch phrase of “the greatest wealth transfer the world has ever seen” is not what you think it will be in the end.
Your stable coins will be crushed, BTC & ETH will skyrocket to levels we can barely imagine in our linear thinking. Then they pump and dump alt tokens and the chosen projects will survive and those true DeFi projects will be liquidated and crushed. And everyone’s remaining capital is going to be extracted out of the market from big finance in the opposite way everyone is thinking.
But we anon’s have front run the elites. That only works if you have the spine to hold the line, play the same game against them…momentum and flow is key.
Scams
Projects being hyped up, trying to release tokens in a far equitable way, farm their tokens out…whales with $ billions come in and extract yield/aka value by dumping the new token on the average supporter. Now imagine this on a scale no one has ever thought about?
Prices fluctuate by huge margins, whales come into the DeFi world with either valued tokens sell into the DEXs, drop the floor price and then capture the new floor priced tokens and return to the CEXs to dump into the order books cheaper tokens…extracting value in two places. But pulling the liquidity out of the DEXs, by removing more and more tokens each and every time. The power of Uniswaps pools decreases, as slippage increases, price movements fluctuate even more and DEXs bleed out liquidity not only from CEXs, whales but from every other DeFi platform as they fight for liquidity to the death.
This is the worst case, the other is that only approved arbitrage bots/projects that are VC backed and approved by big finance will be allowed to do arbitrage, but again, this is just the slow bleed approach. Timed, along with the MEV from Ethereum PoS and consolidation of the space, is why Lidos would be a very good pick and is being highlighted by top influencers. Why, because big finance is behind this and their point man for taking over Ethereum is Lidos.
Ethereum
FUD today is centered around why Proof of Work (PoW) is bad and proof of staking (PoS) is better. It then drives us to realize that once we go to PoS, the average small investor will not truly have an opportunity to run the infrastructure of validators. Whales can drive the price way up to ensure only those with massive wealth can control them.
Dive further into the rabbit hole on Ethereum is that why the sudden rush to NFTs, it’s a form of locking up liquidity just like Proof of Stake (PoS). But it brings no ROI for the holder. In order to gain more control, big finance needs more ETH locked up from the little people/average users. A great way to do this is via NFTs, giving the owner the illusion of price increases in an illiquid asset, that will only be able to be liquidated by those with the ETH…prices go up. But who is buying from whom? Whales from whales, of course. Very few projects will be able to generate the hype to capture the whale's attention and when they do, fully expect them to pump those prices, to capture more liquidity from the smaller and mid-sized whales.
Ethereum is planned as our DeFi / DEX world, our belief that it will exist as we want it to today. But in reality, other forces are driving this from behind the scenes.
Stable Tokens
It is important to understand that central banks don’t want competition, stable tokens are a direct threat. The challenge is that their Central Bank Digital Currency (CBDC), are not finalized at present. These will be designed and modeled from how China is able to roll out there version. But these will be used to control our spending, what we buy, when we can buy, from whom we can buy, how much we can spend, etc….FUD around these will increase, Tether and USDC will lead the way.
Several point men have been identified, influencers are being leveraged to push the message, stable tokens are being threatened or being set-up as straw-men to collapse like a house of cards.
Elite Point Men
Every story needs a villain. Big finance, of course, is the instigator here. Their inside man is Sam Bankman, founder of Alameda Research, Forbes has him worth an estimated $22B. He made his initial fortune on arbitrage of BTC between the states and Japan/Korea during the last Bull Run and is setting this one up for a similar event, as well as positioning big finance to takeover Ethereum (bad side of MEV not stopped article). Big finance can get its cut of the underlining market that has been slowly drained from their order books by Crypto (Binance being the biggest player here), Alameda gets to capture even more of the market and dominate the future landscape of Crypto. He has been chosen, just like our political class is chosen for us, as the future leader in Crypto.
Bitboy confirmed Sam is backed by the banks and is their chosen one….(found this after I came up with my assessment…interesting how life shows you the path.)
Liquidity Extraction 101 — Big Data Protocol
While DeFi yield farming is a huge industry, many try their hand at earning those juicy APYs…in reality, the whales are truly successful as they have more capital. Thus, they dump on all smaller holders, essentially extracting wealth from the 99% and transferring it to the 1%.
Let’s look at Big Data Protocol, their objective is to become a DeFi Protocol Powering a Liquid Marketplace for Commercially Valuable Data by releasing valuable data sets as “Initial Data Offerings (IDOs)” using the BDP Token to generate the liquidity for the data sets.
The challenge was that they were offering very attractive APYs that attracted some small investors. Nearly $6.6B was used at the height of farming, the whales saw this project as free capital and the supporters became the exit liquidity.
This is a prime example of the risks with projects that get the cross-hairs of big whales in space. They become targeted for liquidity extraction and the whales initiate the “Rotator Effect”, extracting wealth from the people to them, the elite.
Hidden Fees
Liquidity farm risks are from all sides. The projects also have the “Rotator Effect” as well. By charging fees to enter and exit, these fees can shock people at first. Just look at XFIAs farm approach, its launch took over 25% of all Ethereum blocks for several hours and the community and whales paid crazy prices to enter the farm, some reporting as high as $10–20K.
Gas Fees
I list several articles below to help you understand the features built into Ethereum.
Part 2: https://cyberstrategy1.medium.com/bottom-line-on-ethereum-gas-fees-e6a411e35e8d
Part 3: https://cyberstrategy1.medium.com/defis-secret-weapon-automated-market-markers-amms-9d15808cf862
Rotator Effect Summary
As you can see the big players are making a move to consolidate liquidity. The reason they want to wall it off and extract it from the DEX & DeFi world, is that the DeFi world is their greatest threat.
Their method or tactic is the Rotator Effect, moving capital from the masses to elite. If this is true as we have seen several tactics above, we have seen the preview of the future. It brings in the next stage of lockdowns, social scores, financial exclusion and control mechanisms… Even if you have any remaining capital, the indirect pressures you face will be overbearing.
Or will this dystopian future ever exist at all? The answer lies out there…it is clearly marked for all to see in plain sight. Look to where those shining the light, don’t shine the light at all!
But more on my beliefs and others on how we win this conflict to end all conflicts. Your answers are there…part 3 our counter response!
Part 1— Crypto Deified Sagas
Part 3 — Crypto Tenet Sagas
About Cyber Strategy Institute
Was established to provide clarity in the Cyber Domain, especially centered around Strategy and Decision Making. After developing a Cyber Strategy Truths Strategic Framework, it clearly clarified that current approaches by organizations and their leaders are failing. That to deliver a real secure future will be through leveraging blockchains and incentivizing everyone’s time and value.
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