The trader made the huge gain by using a bot to purchase the token immediately it started trading.
According to a recent report from Lookonchain, a blockchain analysis platform, a trader used 70 Solana (SOL), worth almost $10,000, to buy about 82 million tokens of a new memecoin called BAKED. Within 30 minutes, they sold all their tokens for 21,581 SOL, making over $3 million from their initial investment.
Someone sniped $BAKED and made 21,511 $SOL($3M) in just 30 minutes, a gain of 307x!
How did he do it?
We also found that the team and insiders control 763.8M $BAKED(76.38% of the total supply).
1/ Here is a thread.🧵 pic.twitter.com/KQ16KYGl7t
— Lookonchain (@lookonchain) July 1, 2024
This trade is an example of cryptocurrency sniping, a strategy that involves buying a token as soon as it becomes available, often using a trading bot. Lookonchain concluded that the trader was likely not a project insider. They based this on the trader’s history of three similar attempts, where they lost money on two.
The platform also identified 15 out of 19 addresses likely belonging to the same insider, who withdrew SOL from the cryptocurrency exchange Bitget three days before BAKED’s launch. These insider wallets are estimated to have purchased around 78% of the total BAKED supply. Even after some selling, they still hold approximately 76%.
The launch of BAKED saw significant insider activity. Lookonchain found that approximately 800 million tokens were acquired within a second, with about half ending up in the developer’s wallet. BAKED was launched on DegenFund and faced accusations of manipulation, partly due to the sniping. In response, BAKED’s official X page claimed the launch was fair.
High-Risk Trade Goes Wrong
In contrast, an investor lost over $300,000 in less than a minute after a high-risk crypto trade went wrong last month. The investor bought 91,705.6 $DJT tokens for 2,500 $SOL, worth about $342,100. Just 44 seconds later, they sold the tokens for only 4.91 $SOL, worth about $673. The investor reportedly bought from the wrong pool via a bot.
These two cases highlight the extreme volatility and risk inherent in cryptocurrency investments. While one trader made a fortune through timely and perhaps lucky moves, another faced substantial losses due to a minor error in judgment. This stark contrast underscores the importance of thorough research and careful strategy in the unpredictable crypto market. Investors need to understand the risks and ensure they have the right information before making trades. Such diligence can mean the difference between massive gains and devastating losses.