Behind the Prosperity of the Solana Ecosystem: Market Manipulation Becomes the New Normal

The recent development trends in the Solana ecosystem have attracted the attention of many observers. Once, some nonsensical tokens could see their market value soar several times due to a celebrity photo. Now, the market seems to be shifting towards a more rational mindset, viewing "bundled bullishness" as the main way to drive price increases. This shift reflects an interesting evolution in the speculative nature of the cryptocurrency market.

Currently, tokens that can achieve value growth are mainly divided into two categories: one category includes tokens that are manipulated through various means, such as bundled tokens, early preferential allocation tokens, and tokens that are severely controlled by internal trading; the other category consists of tokens that can generate actual returns. This phenomenon reveals a harsh reality: either the market is dominated by manipulation, or it returns to a traditional capitalist value assessment system.

When market manipulation becomes an important indicator for judging the price trends of tokens, we must admit that the current on-chain ecological cycle may have entered its final phase. On the surface, the on-chain ecosystem seems to be thriving, but in reality, some participants are artificially driving up the prices of certain tokens using various means.

This phenomenon is not unprecedented. Looking back at history, we can find similar cases, such as a large copper trading event from 1985 to 1996. In that incident, a trader attempted to maintain the appearance of market prosperity by illegally building a massive long position, even though the actual health of the market continued to deteriorate.

Capitalism may resemble a voting machine in the short term, driven by emotions and speculation; but in the long run, it will ultimately return to the essence of value. The "manipulation gap" on the current Solana chain is precisely a curtain that hides the truth. When we delve into the intentions of internal trading groups and project parties to control most of the liquidity, as well as traders using "manipulation" as a means of competition, we can see the true situation behind the curtain.

However, this manipulation pattern will eventually collapse. Just like the aforementioned copper trading event, as positions are liquidated, prices quickly revert to previous lows. The "manipulation gap" of Solana will also disintegrate in a similar way, and the true state of the market will ultimately be revealed. History has repeatedly shown that the truth of capitalism cannot be concealed forever.

The current prosperity of the Solana ecosystem is actually a game driven by insiders through bundled tokens and artificially manipulated liquidity. Here, the manipulation is not only not hidden but has become a competitive advantage. However, like similar cases in history, this gap will ultimately lead to a collapse.

The Solana ecosystem currently resembles a self-consuming casino that can only be sustained under slow and steady inflows of liquidity. Once certain key projects decide not to conduct large-scale airdrops, the prosperity of the entire ecosystem may abruptly halt. What we are currently witnessing may just be the remnants of a once-thriving scene. The "manipulation gap" will eventually collapse, and the result could be quite brutal.

Why is this happening? Because we are already at the end of this cycle. Combining the deteriorating macroeconomic environment with the fragility of the human-supported on-chain economy leads to one result: a massive withdrawal of capital.

In this case, some token manipulators have only one goal - to exit as quickly as possible. These tokens have no future cash flow, no real utility, and no trust foundation. Only insiders attempt to seize value at the last moment. This is why certain tokens are so dangerous in the current cycle. When people generally believe that an asset is fundamentally worthless, the only consensus is to sell off. This means that the only goal of insiders becomes clear: to profit as much as possible before the curtain falls.

When the manipulation gap finally disappears, what will dominate the market? The answer is a return to the essence of capitalism.

It is overly naive to believe that cryptocurrencies will always be speculative and to think that certain tokens are always the most positive expected value choice simply because of a bad experience with utility tokens. As traders, we tend to believe in any option that can bring the highest returns. Some tokens naturally create a good environment for maximizing profits (especially at the end of cycles) because you can "manipulate" without violating regulatory rules and without taking any responsibility. But I think this is just the natural state of the late cycle, not a new normal that will prevail forever.

In the future, we may see the market refocus on utility tokens. The internet capital market is not a bad concept, but I believe it may have been deployed on the wrong blockchain. While we can break the feedback loop of the lack of market appeal for utility tokens, we cannot change certain human behavioral patterns. As for the culture of Solana, I think it may somewhat self-destruct. This is more of my personal opinion than a conclusion drawn from observations.

It is worth noting that I am not suggesting that traders should short these manipulated tokens. On the contrary, if action is to be taken, it may be more appropriate to consider going long. In this market (especially in on-chain trading), being too rigid in your ethical stance may put you at a disadvantage. You may ultimately find yourself marginalized because you feel a higher moral obligation to not participate in this game. In reality, there are various imperfections not only in this industry but in the entire world.

I have seen many traders develop a moral dilemma after understanding the true mechanics of the market. I have had similar experiences myself. However, instead of shouting at the system, it is better to embrace it and understand how it works. 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 reduce my risk exposure in August. Another option is to focus on other blockchains, such as Base, which has been performing well but hasn't received much attention. The liquidity injection of certain projects should not be underestimated. Recently, I have transferred some funds to Base and increased my investment there instead of continuing to invest in Solana.