In a fiery outburst that has sent ripples through the crypto sphere, Victor Ji, the co-founder of Manta Network, has unleashed a scathing critique against crypto market makers and OTC traders. Labeling them as nothing short of “leeches,” Ji’s candid remarks on X (formerly Twitter) paint a grim picture of how these entities allegedly exploit crypto projects, draining their vital resources. Are market makers truly essential partners, or are they, as Ji suggests, a parasitic force in the volatile world of cryptocurrency?
The Explosive Accusation: Are Market Makers ‘Leeches’ on Crypto Projects?
Victor Ji’s unfiltered commentary throws a harsh spotlight on the often-opaque relationships between crypto projects and market makers. He didn’t mince words, stating unequivocally that these firms are “leeches.” But what exactly fueled such a strong accusation? According to Ji, the core issue lies in the relentless and, in his view, opportunistic approaches employed by these market makers.
- Daily Barrage of Proposals: Ji revealed the sheer volume of outreach from market makers, receiving multiple proposals daily, all vying to purchase Manta Network‘s tokens. This constant pressure, he implies, feels less like genuine partnership and more like aggressive acquisition.
- Ignoring Project Fundamentals: The crux of Ji’s frustration seems to stem from a perceived lack of interest in the underlying value and vision of crypto projects. He accuses market makers of focusing solely on token acquisition, seemingly disregarding the long-term health and potential of the projects they engage with.
- Resource Drain: The “leech” analogy suggests a significant drain on project resources. While not explicitly detailed, this could imply that the terms offered by market makers are unfavorable to crypto projects, potentially siphoning off tokens at valuations that don’t reflect the project’s true worth or future potential.
This isn’t just a generic complaint; it’s a direct indictment from a founder deeply embedded in the crypto space, raising critical questions about the ethics and practices within the market maker ecosystem.
Token Allocation Strategy: Victor Ji’s Hard-Earned Wisdom
Beyond simply criticizing market makers, Victor Ji offered practical advice derived from Manta Network‘s own experiences, particularly highlighting a cautionary tale involving Calamari Network (KMA) and the now-infamous Three Arrows Capital (3AC). His recommendations center around a crucial aspect for any crypto project: token allocation.
The Calamari Network – 3AC Fiasco: A Stark Warning
Ji’s account of the Calamari Network (KMA) situation serves as a stark warning to crypto projects navigating the complexities of market makers. He alleges that Three Arrows Capital (3AC), a once-prominent crypto hedge fund, acted in direct contradiction to their agreements. Despite assurances to the contrary, 3AC purportedly liquidated all the tokens allocated to them for market making purposes. This alleged breach of trust not only highlights the risks involved but underscores the importance of due diligence and robust contractual safeguards when dealing with market makers.
Minimal Token Allocation: A Strategy for Project Sustainability
In light of such experiences, Ji strongly advises crypto projects to adopt a conservative approach to token allocation for market making. His core recommendation is to lend only minimal token amounts. This strategy is rooted in the principle of risk mitigation and project self-preservation. By limiting the token allocation, crypto projects can:
- Reduce Downside Risk: Minimize potential losses if a market maker acts unscrupulously or faces unforeseen financial difficulties, as allegedly happened with 3AC.
- Maintain Token Control: Retain greater control over their token supply, preventing excessive dumping pressure and safeguarding token value.
- Incentivize Long-Term Alignment: Encourage market makers to focus on genuinely supporting the project’s growth and liquidity rather than short-term gains from large token holdings.
The 0.2% Cap: A Concrete Guideline for Token Allocation
To provide a tangible benchmark, Victor Ji suggests capping token allocation to market makers at a mere 0.2% of the total token supply. This incredibly low percentage underscores his strong belief in minimal exposure and maximum project protection. While this figure might seem restrictive, it reflects a philosophy of extreme caution and prioritizes the long-term interests of crypto projects over the potentially fleeting benefits of aggressive market making partnerships.
Why is Victor Ji Speaking Out Now?
The timing and intensity of Victor Ji‘s statements raise the question: Why is he choosing to publicly criticize market makers at this moment? Several factors could be at play:
- Proactive Transparency: Ji might be aiming for proactive transparency, wanting to share Manta Network‘s learnings and warn other crypto projects about potential pitfalls in dealing with market makers. This could be a move to foster a more ethical and sustainable ecosystem within the crypto space.
- Recent Experiences: It’s possible that Manta Network or projects within their ecosystem have recently encountered negative experiences with market makers, prompting Ji to take a public stance. The Calamari Network/3AC example suggests past grievances are informing his current perspective.
- Industry-Wide Concerns: Ji’s comments could reflect broader, simmering concerns within the crypto community regarding the practices of some market makers. His public criticism might be resonating with other founders and project teams who share similar frustrations but have been hesitant to voice them openly.
Whatever the precise motivations, Victor Ji‘s outspokenness is undoubtedly sparking a crucial conversation about the role, ethics, and impact of market makers on crypto projects. His perspective, rooted in real-world experiences and a clear commitment to project sustainability, provides valuable food for thought for anyone navigating the intricate world of cryptocurrency.
Navigating the Market Maker Maze: Key Takeaways for Crypto Projects
Victor Ji’s critique, while pointed, offers valuable lessons for crypto projects seeking to thrive in the competitive crypto landscape. Here are some actionable insights drawn from his experience and recommendations:
- Due Diligence is Paramount: Thoroughly vet potential market makers. Don’t solely focus on proposed trading volumes or promised liquidity. Investigate their track record, financial stability, and ethical reputation within the industry.
- Prioritize Contractual Safeguards: Ensure ironclad contracts with market makers that clearly define token usage, restrictions on selling allocated tokens, and dispute resolution mechanisms. Learn from the alleged 3AC situation and build in robust protections.
- Minimal Token Allocation is Prudent: Adopt a conservative approach to token allocation. Ji’s 0.2% cap serves as a powerful example of prioritizing project protection. Start small and scale up cautiously if trust and performance are established.
- Focus on Long-Term Alignment: Seek market makers who demonstrate a genuine interest in your project’s long-term vision and success, not just short-term trading opportunities. Look for partners who are willing to align their incentives with yours.
- Open Communication and Transparency: Maintain open communication channels with your community and be transparent about your market maker relationships. Address concerns proactively and foster trust by demonstrating responsible token management.
Conclusion: A Wake-Up Call for the Crypto Ecosystem
Victor Ji‘s bold accusations against market makers serve as a powerful wake-up call for the entire crypto projects ecosystem. His “leech” analogy, while provocative, effectively highlights the potential for exploitation and the critical need for crypto projects to exercise extreme caution and diligence when engaging with these entities. By sharing Manta Network‘s experiences and advocating for minimal token allocation, Ji is urging a fundamental shift towards greater project protection and more ethical practices within the crypto market. This controversy, ignited by Victor Ji, has the potential to reshape the dynamics between crypto projects and market makers, fostering a more sustainable and equitable future for the decentralized web.
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