The Truth Behind the Solana On-Chain Trading Ecosystem: Manipulation Behind Prosperity

Recently, the Solana on-chain trading ecosystem has shown some noteworthy phenomena. In the past, some absurd tokens could surge several times due to the leak of a celebrity photo. Now, the market is gradually returning to rationality, and only "bundled bullishness" may drive prices up. This change reflects an interesting transformation of the speculative trend in the crypto market.

Currently, the tokens that can achieve value growth are mainly divided into two categories: one is "manipulation-type tokens," including bundled tokens, tokens with early preferential allocation, and tokens that are deeply controlled by internal trading; the other is "yield-type tokens," such as HYPE and ENA. This phenomenon reveals a harsh reality: either "manipulation" dominates the market, or it returns to the traditional capitalist value assessment system.

When "manipulation" becomes an important indicator for judging whether the price of a token will rise, we can conclude that the current on-chain cycle has entered its final stage. On the surface, the "health" status of the on-chain ecosystem seems better than the actual situation, but in fact, some participants are using "manipulative behavior" as a tool to artificially drive up the prices of certain tokens by controlling the market.

This phenomenon is not unprecedented; it is a reenactment of history. The Sumitomo copper incident from 1985 to 1996 is a typical case. At that time, a single trader weaponized the manipulation by illegally establishing billions of dollars in long positions, attempting to maintain an appearance of prosperity in the market, even as the actual health of the market continued to deteriorate.

Capitalism is more like a voting machine in the short term, driven by emotions and speculation; but in the long run, it is a weighing machine that will ultimately reveal the truth.

The current "manipulation gap" on the Solana blockchain is a veil that obscures the truth. By closely observing the intentions of internal trading groups and project parties to control most of the liquid supply, as well as traders using "manipulation" as a competitive advantage, one can glimpse the shadows hidden behind the curtain.

However, this manipulation pattern will eventually collapse. Just like the Sumitomo copper incident, as Sumitomo's position was liquidated in mid-1996, copper prices quickly fell back to previous lows. Solana's "manipulation gap" will also disintegrate in a similar manner, and the true health of the market will ultimately be revealed. History has repeatedly proven that the truth of capitalism cannot be concealed forever.

The apparent prosperity on the Solana blockchain is actually a game driven by insiders who bundle tokens and artificially manipulate liquidity. Here, manipulative behavior is not only unmasked but has become a competitive advantage. However, just like the Sumitomo copper market manipulation case, this gap will inevitably lead to a collapse.

The Solana ecosystem can only be sustained under conditions of slow and stable liquidity inflow. When certain projects decide not to conduct large-scale airdrops, the music stops. What you hear now is just an echo of something that once made the entire ecosystem boil. The "manipulation gap" will eventually collapse—and when it does, it will be brutal.

The reason is that we are already at the end of this cycle. When the deteriorating macroeconomic environment is combined with the fragility of the artificially supported on-chain economy, the result is a large-scale capital withdrawal.

The liquidity of manipulating molecules in Memecoin has only one goal - to leave. There are no future cash flows, no utility, and no trust. Only insiders take turns trying to seize value before the lights go out. This is why Memecoin is so dangerous in the current cycle. When people generally believe that the asset is fundamentally worthless, the only remaining consensus is to sell off. This means the only clear goal of insiders becomes: to scam as much as possible before the curtain falls.

When the manipulation gap comes to an end, capitalism will prevail.

It is overly naive to believe that cryptocurrencies will always have the attributes of a large casino and to assume that Memecoins will always be the most positive expected value bets simply because of a poor experience with utility tokens. As traders, we start to believe in any currency that can bring the maximum returns. Memecoins inherently create a good environment for maximizing profits (, especially at the end of the cycle ), because you can "manipulate" without violating regulatory rules and without any accountability. I believe this is just a natural state of the late cycle, not a new normal that will always prevail.

We will see the pendulum swing back to utility tokens again. The internet capital market is not a bad concept, but I firmly believe it is deployed on the wrong blockchain. While we can break the feedback loop of the lack of market enthusiasm for utility tokens, we cannot break the feedback loop driven by human addictive behavior. As for the culture of Solana, I think it has self-destructed to some extent. This is more my opinion than a conclusion drawn from observation.

Traders should believe that the manipulation actions taken by others to drive up the price of tokens are a net gain for holding that asset. In this market (, especially in on-chain ) trading, it is very dangerous to be in an ivory tower of moral superiority. You may ultimately be marginalized because you feel you have a higher moral obligation not to participate in this scam. The harsh reality is that not only this industry, but the entire world is full of fraud.

I see many traders develop this moral complex after understanding the true identities of market makers, exchanges, and anonymous traders, as well as the truth about insider information flows. I myself was troubled by the same illusion for several months. Don't be the person shouting at the system; embrace it, embrace the worst-case scenario, and ultimately you will understand the market better than ever before.

So, if you don't plan to reduce risk by shorting, what other options are there?

I personally decided to significantly lower my risk in August. Another option is to focus on other blockchains, like Base, which has been performing well but no one is talking about. The liquidity injection into cryptocurrencies like ZORA should not be underestimated. Personally, I have moved some funds to Base in the past few days and increased my risk exposure there, instead of putting myself into Solana.