What is Anti-Dump/Anti-Dumping Policy?
Let's find out Anti-Dump/Anti-Dumping Policy meaning, definition in crypto, what is Anti-Dump/Anti-Dumping Policy, and all other detailed facts.
There is a form of fraud referred to as the pump-and-dump scheme. It takes place by fraudsters luring innocent investors into purchasing an asset that is based on false information. Therefore, the anti-dumping policy is a way of saving investors from falling into the scheme.
To be exact, the scenario of when a whale (a person that holds a large number of specific cryptocurrencies) purchases a lot of tokens with the goal that the price will significantly increase resulting in him gaining a profit by selling everything at once, is called dumping.
A great example of this is the Squid Game token, which was created after the show. It skyrocketed to 14,300% in the span of one week and dropped to zero in a few seconds. To put things into perspective, the creators had a malicious plan in mind - once you bought the token, it’s impossible to sell it as a result of the anti-dumping policy.
The developers earned approximately $12 million, while everyone else was left with nothing.
It can be tempting to take your chances and invest, nevertheless, to ensure that you won’t end up like the ones that purchased Squid Game tokens, you must follow some regulations.
For instance, you need to be alert if any social media groups indicate that a pump should take place soon. These individuals might be directing the pump, therefore, it might be a pump-and-dump scheme.
Another thing is - don’t take drastic measures. Don’t invest an amount you can’t lose, everything might not go the way you expected. So, make sure that your investment won’t become a major problem.
Lastly, make smarter investment decisions by having professional guidance. You can do your own investigating, but if preferred, there are always people that could help. But be cautious of the influencers who tend to promote a particular token out of nowhere.
Other rules, such as buybacks, exist. Buybacks contribute to a reduction in the number of tokens in circulation over time. The overarching trend is for token prices to rise, resulting in increased anticipation. Nexo, Binance, and other projects are known to use a buyback policy.
Following an incident, Nexo chose to limit the number of project tokens in circulation, which greatly aided in boosting the market price.
Furthermore, there are tokens that work differently. As an example, DrunkDoge controls price volatility since whales are unable to buy or sell large amounts of tokens in a single transaction. To discourage excessive currency dumping, it has bigger taxes and an anti-dumping regulation that imposes a 1/2/6 hour cooling-off.
To keep whales out of THUDERCAKE environment and to prevent dumping the token, it has a few regulations. For instance, it is forbidden to sell more than 0.1 percent of the entire quantity of tokens.
Furthermore, THUNDERCAKE token buy orders can’t go over 0.5 percent of the total supply.