Example - Low Liquidity Trading and ''Chart Protection''

Whale A has a ton of tokens in his favorite altcoin, making him a top holder. While he intends to hold most of these, he remembers that it’s always wise to take profits and diversify his portfolio. As such, he intends to offload 25% of his holdings. Seeing as the token still has relatively low liquidity, a sale of this size in the open market would cause a brutal red candle that would potentially damage the project, its holders, and the remainder of his holdings.

To make matters worse, the price impact from such a sale is high and there is a sell tax on top. It was quite a dilemma for Whale A until he found Trader C had the same token on his watchlist to purchase, and he found his entry to buy in and become a large holder. He was concerned about the price impact and the potential of being front run, and wasn’t thrilled about the buy tax either.

Whale A and Trader C matched on GigaSwap and made the exchange with the following great things taking place:

  • Whale A took profits

  • Trader C entered into his position in the token and wasn’t front-run

  • Both avoided unfavorable price impact

  • Neither got taxed as the token’s contract does not tax transfers

  • The chart was unaffected - No unneeded volatility for the project!

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