31 May 2022

How Terra created the perfect exit liquidity

If the Terra Ecosystem was a sinking cruise ship, the captain and distinguished guests fled in superyachts, leaving most passengers behind without lifeboats.
Dumping on retail
In a standard 'pump-and-dump' scheme, the ‘dumpers’ hype up demand before aggressively selling their bags into the built-up demand. During the dump, often called a rug pull, usual supply-demand dynamics apply. Eventually, the supply offered by the dumpers seeking to squeeze out every penny dominates demand, and the price crashes – pump-and-dump completed.The nature of the pump-and-dump scheme is such that profits are created while killing the token in the rug pull. The success of the pump-and-dump is determined by how much exit liquidity you are able to make.
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