Maybe this might sound too hasty, but it was obvious! On January 8th, the company ended, resulting in the distribution of 26,000,000 DOLO tokens to 1,000 participating users. For a moment, right now it's around ±2,000,000$, and for a project with such a small market cap, that's a huge amount.
To make it into this top 1000 users, you need to understand crypto or have a large volume of suitable assets, meaning those who made it into the top and should receive rewards are very familiar with the term "hedging," which likely most applied to their rewards to avoid "losing in price." There were also probably some random newcomers who thought this junk would be aggressively pumped right now...
*Hedging is a risk management strategy using futures to protect capital from adverse price movements. Simply put, they short DOLO to preserve their future rewards.
Naturally, the market maker of this asset also understands the entire situation and must exploit it in their favor. Thus, they are currently pumping the asset, where the main hedging price was around $0.043 per DOLO, and thus the liquidation point for these guys at 1x leverage will be around $0.086 per token. But that’s not all...
When volatility rises on an asset, funding rates can increase significantly, meaning the money you used to hedge will shrink before your eyes (in this case). Then comes: panic, FOMO, averaging down, mistakes — everything a market maker needs to confuse seemingly rational people at first.
I also made it into this top 1000, but immediately hedging my reward of 14,000 DOLO seemed too easy to me, so I did the opposite — i.e., went long on the asset from $0.043. Considering that rewards could be distributed as late as January 31st, there was plenty of room for maneuvering.
And today we see DOLO rising nearly 100%, and those who took excessive risks have already been successfully liquidated — and the reason for this is everything I described above. Initially, this was a dead asset, but now no one knows where the peak will be — everything will depend on the market maker's plans.
