Dumpy.fun Spinoff Squeezy.lol Launches to Trigger Short Squeezes on Solana Memecoins

The new market called Squeezy.lol will allow users to take the other side of the trade and conceivably trigger short squeezes on heavily shorted memecoins.

Solana protocol Dumpy.fun is adding a new feature that will completely change its initial purpose, which was to short Solana memecoins.

The new marketplace, called Squeezy.lol, will allow users to take the opposite side of the trade and potentially trigger short squeezes on memecoins that are heavily shorted.

Shorts are trades where traders bet on the price of an asset falling. Short squeezes, on the other hand, happen when the price of such an asset rises suddenly, which forces traders who are short to either close their positions or buy the asset to limit their losses.

Using a “squeeze explorer,” Squeezy.lol will provide traders with on-chain records of shorts placed on its sister platform Dumpy.fun.

This is similar to giving users order flows of the trades on Dumpy.fun, which could change the nature of memecoin trading player versus player (PvP).

PvP is the crypto industry’s term for the zero-sum nature of crypto trading that pits the handful of privileged insiders against a larger cast of investors hoping to back the next successful token.

According to CoinGecko, the memecoin market in crypto is valued at a minimum of $40 billion.

This figure is notably lower than the market size of $53 billion when Dumpy.fun launched three weeks ago, which suggests the likely profitability of shorting memecoins.

However, the opposite trade could be profitable as a new branch of the PvP wars emerges, allowing staunch backers of a targeted memecoin to rally interest and protect their investments from would-be short sellers.

Crypto memecoins have no known utility and are created to capitalize on the popularity of mimetic engagement within a community, similar to the well-known GameStop short squeeze of 2021.

GME, the stock ticker for the retail gaming company GameStop, experienced a massive short squeeze in early 2021, causing its price to reach a premarket value of $500 per share, which is more than 30 times its value a month prior.

Open beta

Although Squeezy.lol will launch on Aug. 27, its corresponding platform Dumpy.Fun has advanced from a private testing phase to an open beta stage.

Users are now able to begin shorting memecoins on the platform without having to join the waitlist.

Initially launching with support for only one memecoin, Catwifhat, a $19 million asset launched earlier this year, Dumpy.Fun now supports 11 memecoins and will soon allow permissionless token listings, enabling traders to short newly created memecoins.

Our Nigeria-based DeFi correspondent is Osato Avan-Nomayo. He covers DeFi and tech. Please contact him at osato@dlnews.com to share tips or information about stories.