In this paper, I wrote about three recent initial offerings, two IDOs and one IFO, which were brought to my attention. All offerings were launched on DeFi protocols acting as decentralized exchanges.
I will assess whether it is possible to take a profit either through using an option-like strategy or through participating as a market maker (more commonly known as LPs in crypto markets) in initial offerings.
These offerings, a kind of a zero-sum game, are rife with pump-and-dump schemes. While you are trying to grab a portion of someone else’s get-rich-quick scheme, seeking to sell to the next greater fool, your allegedly impermanent losses may become permanent.
A victim of the pump-and-dump scheme will be the savior of another’s get-rich-quick scheme. In the current market environment, it may seem that there is still plenty of money on the sidelines and that every dump will be followed by another pump. However, both money and time are not limitless in one’s lifetime. Understanding how these schemes are staged and unfold will save you both time and money.