The Dynamics of On-Chain Liquidity Games: Developers, Snipers, and Traders

According to BlockBeats, on-chain trading is a liquidity game involving developers, snipers, on-chain data traders, and others. As the liquidity entering the on-chain field decreases, the competition among participants becomes more intense, resulting in those at the top of the pyramid reaping most of the rewards. Developers and insiders often slowly pump or 'exploit' false utility. These were very popular in the early AI craze, as no one really understood AI, but everyone wanted early exposure. They never completed more than 1% of the roadmap, often hyped by opinion leaders (KOLs). The team usually allocates a large supply to themselves at the start of the contract and distributes it before others. These tokens are then hidden in multiple wallets and sold. Programmed snipers use custom robots to systematically snipe multiple ETH projects. The robots follow specific parameters based on smart contracts and transaction volume. The goal is to achieve 10-100 times returns on a few projects from many failed or runaway snipes, almost like a form of yield. Manual snipers (ETH) are one of the most profitable on-chain traders. They search for new contract addresses or obtain contract addresses through internal messages. They simulate contracts to check their security and determine other potential indicators or understand the team background. In many cases, the project is subject to snipers, who can smash the project to zero in the early stages. On-chain data traders track the actions of snipers and insiders. They track the actions of profitable (highest PNL) wallets. They usually buy strong projects after the sniper sells; or, even if they know that the sniper holds a large supply, they will buy if the launch is very promising. They are long-term holders. Other traders have not yet learned to use Etherscan or how to check the basic data indicators of tokens. They get information from call groups, opinion leaders (KOLs), and Crypto Twitter (CT). These traders are likely to have given up buying new utility projects or meme coins. Or they slowly start learning on-chain trading and gradually upgrade to the above categories.