Project name changes are a common phenomenon in the cryptocurrency world, but they are generally adjustments to brand and communication.
But changing the name and launching a new product is not common.
Yesterday, Solend, a well-known lending protocol on Solana, was renamed Save , which literally means safer. But the new product it brought gave people a hint of danger and excitement.
In addition to the newly introduced assets such as SUSD and SaveSOL, Solend has also created a platform that allows shorting Meme coins - dumpy.fun (X: @dumpydotfun).
The meaning of this name is self-explanatory. Previously, there was Pump.fun, which started a long carnival of randomly posting memes; and this dumpy.fun, obviously wanted to form a contrast, shorting Meme coins to start an airdrop carnival.
Solend (now Save) wrote in his blog introduction about dumpy.fun:
“Memecoin has reached a fever pitch, but money grabs and profit taking are hurting the community. dumpy.fun is a platform for shorting memecoin that allows users to profit from corrections. It taps into the deepest on-chain liquidity and is a better alternative to perpetual contracts. dumpy.fun is powered by Save.”
Since the product has not yet been officially launched, we also flipped through the product design white paper to see in advance what shorting Meme Coin is all about.
dumpy.fun uses the on-chain contract DEX model to design short selling
What goes up, must come down --- Newton
At the beginning of Dumpy.funs white paper, this classic gravity theory was used to satirize that Meme coin would eventually return to zero, so they took advantage of the situation and created a platform dumpy.fun that can short Meme coin.
Platform nature: It is not a DEX (decentralized exchange) in the traditional sense. It is more like a financial instrument platform dedicated to short selling, combining lending and trading functions.
How it works:
dumpy.fun uses other platforms (such as Solend, hereinafter referred to as Save) to conduct lending operations. The lending business itself is also Saves main business.
Then perform token swap through Jupiter.
This combination design allows users to short sell assets without directly holding them.
However, since it is an action across the entire chain, where does the funds to support short selling come from?
The answer given by dumpy.fun is to use the funds of depositors on Save and increase the deposit interest rate on its new platform to attract users to deposit money.
The interest rate that persuades them to deposit money comes from:
Interest paid by borrowers: Short sellers need to pay interest to borrow assets.
Transaction fees: The platform may charge a certain percentage of the transaction.
Liquidation Fees: When a short seller is liquidated, part of the liquidation fees may be distributed to depositors.
Perhaps the following example can help you understand the design of dumpy.fun more quickly:
Let’s say we want to short WIF.
Step 1: Deposit Collateral
You deposit 100 USDC as collateral.
Step 2: Borrow WIF
The platform helps you borrow WIF tokens worth 100 USDC (from Save or from dumpy.funs own fund pool). Assuming the current WIF price is 1 USDC, you have borrowed 100 WIF.
Step 3: Sell the borrowed WIF
The platform immediately sold these 100 WIFs on the market and received 100 USDC.
The current situation is:
You owe the platform 100 WIFs;
The platform has your 100 USDC collateral and the 100 USDC obtained from selling WIF.
Step 4: Wait for the price to change
Assume that the price of WIF drops by 50%, and now 1 WIF is only worth 0.5 USDC.
Step 5: Close the position
You decide to close your position. The platform uses 50 USDC out of the 100 USDC in hand to buy 100 WIFs on the market (because 1 WIF is only worth 0.5 USDC now).
Step 6: Repayment and Settlement
The platform uses the 100 WIFs it has purchased to repay the 100 WIFs you borrowed previously;
The remaining 50 USDC is your profit;
The platform returns the 100 USDC collateral you initially deposited.
Final Results:
You made a profit of 50 USDC;
Your original 100 USDC collateral is returned safely;
The benefit of dumpy.fun is that it automates the process so you don’t have to perform each step manually; and it combines multiple platforms (such as Save lending and Jupiter trading) to achieve this function.
PVP is fierce, playing solo is unpredictable
If most local dogs are destined to return to zero, then wouldnt you be making a lot of money by shorting them all the time?
dumpy.fun obviously does not support this idea, perhaps it wants a more intense PVP game.
In contrast, the platform also provides a Squeeze Explorer interface that displays the liquidation threshold for short positions.
For those who are not familiar with contracts, a short squeeze refers to a phenomenon where the price of a heavily shorted asset suddenly rises, forcing short sellers to quickly buy assets to close their positions, thereby further pushing up prices.
This design is equivalent to showing everyone the current short positions and the funds needed to defeat the shorts.
So if you are a long or a strong market maker who is optimistic about a certain Meme coin, but find that there is a certain amount of funds in the market that are shorting it, you can obviously calculate it and buy it in the opposite direction, pushing up the price of Meme to beat the shorts.
In the context of dumpy.fun:
If a large number of users short a Meme coin (such as WIF).
And other users (perhaps by viewing a “short squeeze explorer”) decide to buy the coin en masse.
This could lead to a similar short squeeze situation, causing the token price to rise rapidly.
Short sellers could face huge losses, while buyers who drive the squeeze could see significant gains.
Obviously, it is not feasible to open a short position without thinking. The purpose of dumpys browser is to make the long and short sides engage in a more intense game.
A single smile can lead to life or death.
With the support of the short-selling mechanism, the PVP of Meme coin will become more intense and even cruel.
Dumpy’s own tweet confirms this:
“Next time someone says your coin is bad, tell them to vote with their money.”
This is obviously a bit like a master of fanning the flames - if you dont like the meme, dont talk nonsense, just open a short position. The subtext is that Im going to set up a game to see whether you shorts are stronger or longs are stronger.
But there is one thing you and I both know:
It is difficult to guess who will win or lose in the finger-guessing game on the stage, but setting up the stage and charging the stage fee is a sure win.
DUMP, dumpy.fun platform currency
As the platform launches, it will also have its own token DUMP.
The main function:
a) Governance rights: holders can participate in the decision-making process of the platform.
b) Fee Sharing: A portion of the transaction fees and liquidation fees generated by the platform are distributed to DUMP holders. This creates a passive income stream that incentivizes long-term holding.
c) Collateral: DUMP can be used as collateral for trading or lending on the platform. This increases the utility and demand for the token.
d) Liquidity Mining: You can earn additional DUMP tokens by providing liquidity. This helps increase the liquidity and stability of the platform.
The platform may implement a token repurchase and destruction mechanism. A portion of the transaction fees may be used to repurchase and destroy DUMP, creating deflationary pressure.
However, the product is not yet online and DUMP has not yet TGE.
Currently, dumpys official website only has the function of filling in an email address to join the waiting queue. Interested players can visit the projects tg for more information.
Currently in the official Telegram community, the platform has launched a meme coin vote to allow everyone to decide which coins will be listed and allowed to be shorted.
Let me remind you again that it is fun to buy memes, and it is also fun to short memes.
I hope you are not the source of other peoples happiness.
