Volume Finance discusses breakout alts in this week’s Volume AMA. Taariq Lewis @LewisTaariq, CEO of VolumeFi (
volume.finance
), is joined by VolumeFi’s Senior DeFi Strategist, Zhibai Zhang @fieldtheory. They talk about the surging Memecoin Season and the importance of MEV Protection.
The host, Taariq Lewis, welcomes everyone on this week’s AMA. VolumeFi builds on top of the Paloma protocol, which is directly owned by the Paloma Foundation. He thanks the 50-60 validators who are participating and supporting the protocol. He adds that the payments only come from the emissions from the blockchain. With that, he also welcomes Zhibai to proceed with the AMA.
The focus of VolumeFi is private key security and private key management - how to manage private keys so that they can work for users without being lost or stolen. Taariq also adds that at VolumeFi, they’re working on themes and topics such as getting more use of their private key and also using private keys across different blockchains. They call it cross-chain messaging, but it’s about using private keys and controlling keys as they move from chain to chain.
Taariq proceeds to discuss Memecoin Season. He mentions a few coins and says that the Wojak coin is worth 0.00008339 cents, but the market cap for this digital token is at 5.8 million and the 24-hour trading volume was about half of that 2.8 million. On trading volume of 2.8 million on a market cap of 5.8 million, Zhibai says that what’s more significant is that the trading volume is more than half of the market cap, namely, more than half of the ownership has been exchanged. Taariq says that it’s not even a month old as it was only launched in the second week of April. It became news because people for it became news for all the bad reasons that people talk about the cryptocurrency industry.
The purpose of this AMA is to talk about how to look at and identify pumps-and-dumps, and then use them as opportunities to profit from them. Taariq says that there may be ways to actually be really careful and look at these opportunities in the bear market as ways to capture value. Because while the party’s going on, the worst thing to do is sit on the sidelines and not do anything. The best thing to do is understand what’s going on, understand the game, and secure a position. Going back to the Wojak coin, Taariq says:
Taariq reminds us that they are not giving any trading advice, the shared information is only for the purpose of understanding how to analyze these movements in the market. He proceeds to say that it is very possible to lose money. Memecoins are controlled by smart contract authors, and those authors may have put up trap doors and many scary things in these pools, so there’s more risk than just trading. There’s software risk and rug pools, but there’s always curiosity. With that, he calls on Zhibai to introduce momentum trading. Zhibai says:
Taariq says that one of the things they noticed about momentum is that it is not long-term. Zhibai says that momentum trading has grown to kind of a fairly wide spectrum, but still the core of it. So, there are people writing longer-term momentum in the days or even weeks. He says that he finds the majority trying to write the short term and it makes more sense to write the short-term momentum because people don’t really necessarily know what’s causing it, but they’ll just follow it. Taariq says that momentum trading is really trading without an understanding of the causal nature of why the price is going up. Because there’s a lack of time for a fundamental analysis of the cause of momentum, people are trading against the statistical performance of the price.
The host brings up Paloma’s Momentum Scanner and says that it is running on their telegram every day. Every day at 6:00 AM and at 6:00 PM, there’s an analysis of momentum that spits out some of these tokens. Zhibai then adds:
It works at a 6-hour, 24-hour, and 7-day from when the program runs to the actual check. Today, there is Radiant Capital as Echelon Prime for Uniswap and Radiant Capital for PancakeSwap as the top momentum users on both those two DEXs. The host then says he noticed Wojak not being listed on the Momentum Bot, but it’s up at 10% on CoinGecko. Zhibai says that it might be because the prices were volatile at the time. And Taariq says that users don’t know when a meme coin actually memes its way into momentum. So users constantly have to be running a momentum scanner to constantly be checking how that works. He also adds that the problem with the momentum scanner is that users wouldn’t know that a meme coin is going to be a meme unless they’re the author. He adds:
Taariq and Zhibai proceed to talk about the risks and bring up sandwich attacks. Taariq mentions Jared from Subway, an MEV bot that was sandwich-attacking people who were trading Pepe, Wojak, and Chad, and spent over 1.1 million in network fees according to the block and earned 700,000 in profits. A lot of people who were apeing into these coins weren’t using any protection for their trades. Taariq further discusses what a sandwich attack is:
Taariq says that these simple sandwich attacks essentially allow Jared to earn $700,000 in profit. Zhibai says that it’s partially because these meme coins have been so popular and there are a lot of trades, which means there’s a lot of potential. It is important to get MEV protection with meme coin trading.
is a VolumeFi product that is a simple front end to many of the popular DEXs that give users MEV protection, partnered with bloXroute. Taariq says that if users use Metamask to trade on PalomaSwap, they’ll be prompted to change their RPC endpoint. It’s going to change the RPC endpoint from Metamask Ethereum to bloXroute. It’s free for everybody who uses PalomaSwap. Users get front run protection out of the box from bloXroute and what bloXroute does is they act as a builder on the network and they will take the transaction, they will build it, and then they submit the transaction to the validators and they get paid, and then users get their MEV protection. Zhibai tells more about the backrun:
It’s like when someone goes to a low liquidity pool and trades into it and they move the price, but that means somebody can take that expensive token and sell into it from another token and find another pool where the token is cheaper. They can buy that token where it’s cheap and sell into it, route into it, and sell into something more expensive and make the difference. So, that arbitrage goes away and the prices are back to being even across pools. Taariq adds:
Taariq then asks Zhibai how will backrun work on Wojak. Zhibai says that as long as there are two pools, and if users are on CoinGecko, they can see the prices are actually different from the two pools. So, one trade could really just break the price dislocation enough, such that there’s backrun. On CoinGecko, Wojak is now on UniswapV2 at 708,000 and liquidity is 700,000. Since there’s so much volume, there would be opportunities for backrun.
Wrapping it up, Taariq encourages everyone to try the Paloma Trading Bot on their Github to see what coins are in the alt season, meme coins that are bumping in momentum. He says the way to check for the meme coin season of the all-coin season is to track momentum and momentum when the party’s just getting started. Also, to avoid getting sandwich attacks, he recommends using Paloma since PalomaSwap does not charge fees and it gives MEV protection. As for backrun, he says that if there are backrun protection opportunities because it’s meme coin season and swapping into coins with low liquidity, like Wojak 700K liquidity is very low, do it with a provider that gives a backrun benefit. He recommends Paloma as it gives GRAINs and it also gives GRAINs for swapping. The GRAINs will be used as a utility token for sending messages to other chains, and trading messages.
With that, the host thanked everyone for listening and Zhibai for joining. He tells everyone to check out the VolumeFi GitHub, which they updated recently, and to get the CoinGecko API and check meme coin season. He also reminds everyone to be careful with the contracts and be safe with the coins.
Stay tuned for next week’s AMA!
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