BlockBeats report, September 2: Tonight, Robinhood’s on-chain narrative surrounding JINQIAN/FAMI’s “short squeeze” has been denied by the parties involved, bringing the on-chain hype to a close. However, reviewing the entire event, the biggest beneficiaries were not only top on-chain traders—smart money also profited significantly by creating JINQIAN trading pairs as liquidity providers on Uniswap.
According to data from the Uniswap official page, during the first wave of JINQIAN’s market cap surge from $7 million to $60 million, the peak APR for the primary trading pair JINQIAN/ETH reached 83,832%, and has since declined to 79,708%. As of the time of writing, the JINQIAN/USDG trading pair still has a trading fee of 6%, with an annualized APR of 126,440%.
This means that if a trader buys JINQIAN tokens during the price surge, then provides unilateral liquidity at a higher price level, promptly claims LP fees, and sells part of their JINQIAN holdings, their risk-reward ratio should be significantly higher than simply holding JINQIAN tokens.
However, current market sentiment has become overly FOMO-driven, with an increasing number of on-chain scams. Even if you create liquidity pools for individual popular meme coins, you cannot fully mitigate the risks associated with price volatility of these tokens—users should be aware of investment risks.