Crypto Flexs
  • DIRECTORY
  • CRYPTO
    • ETHEREUM
    • BITCOIN
    • ALTCOIN
  • BLOCKCHAIN
  • EXCHANGE
  • TRADING
  • HACKING
  • SLOT
  • CASINO
  • SUBMIT
Crypto Flexs
  • DIRECTORY
  • CRYPTO
    • ETHEREUM
    • BITCOIN
    • ALTCOIN
  • BLOCKCHAIN
  • EXCHANGE
  • TRADING
  • HACKING
  • SLOT
  • CASINO
  • SUBMIT
Crypto Flexs
Home»ALTCOIN NEWS»Shorting Solana meme coins can result in losses. The risks are as follows:
ALTCOIN NEWS

Shorting Solana meme coins can result in losses. The risks are as follows:

By Crypto FlexsAugust 1, 20244 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Shorting Solana meme coins can result in losses. The risks are as follows:
Share
Facebook Twitter LinkedIn Pinterest Email

Dumpy.fun becomes the first platform to trade Solana meme coins short term.

Shorting any asset carries significant risks.

The risks extend to lenders on the platform as well.

Meme coins are one of the most volatile assets in cryptocurrencies, driven largely by hype. Their prices fluctuate wildly, rising and falling much more than other tokens. However, until now, traders have only been able to bet on each coin going up.

Most recently, Save Finance, formerly known as Solend, has introduced a platform where traders can bet on these tokens. Dumpy.fun, styled after the popular pump.fun, allows traders to short meme coins and profit when the price drops. However, this strategy carries significant risks, much higher than traditional meme coin trading.

Dumpy.fun allows traders to profit from declining meme coins.

Short selling is coming to Solana meme coins, offering new potential for profit with significant risk. On Tuesday, July 30, Save Finance (formerly Solend) launched dumpy.fun beta, a meme coin short selling platform that allows users to profit from the decline in token value.

Dumpy.fun interface with sample transactions
Source: Dumpy.fun

The platform is simple to use. Users must first choose the token they want to short and the amount they want to short. They must then post collateral equivalent to 200% of the short position. The platform then publishes the trading conditions, allowing users to connect their wallets and choose to trade.

The platform uses the deposited collateral to borrow meme coins and sells them immediately at the current market price. If the token price falls, the trader can buy the token and return the amount to the lender, making a profit. However, if the token price rises, the trader may face rapid liquidation.

Risks of Shorting Meme Coins on Dumpy.fun

Liquidation risk This is the most immediate risk faced by short sellers. This occurs when the token value rises enough that the collateral is insufficient to cover the trade. If the trader fails to provide additional collateral, the position will be liquidated, resulting in the complete loss of the initial collateral.

Dumpy.fun Risk DisclaimerDumpy.fun Risk Disclaimer
Source: Dumpy.fun

For example, if a trader buys WIF at 1.93 USDC per coin, it only takes for WIF to rise to 2.145 USDC before he is faced with a margin call. If he cannot provide more collateral, his position will be liquidated, resulting in a loss of collateral.

This is a significant risk, because meme coins are notoriously volatile. Even if the token shows a medium-term downtrend, a brief uptrend can wipe out short sellers. Furthermore, this high volatility Risk pressureThis would mean a chain of liquidations that could result in significant losses for short sellers.

Risks for lenders on platforms like Dumpy.fun

Short sellers are not the only parties exposed to risk. The most important of these are: Bad debt risk. Traders must be aware that they run the risk of liquidation leaving them with more debt than they can cover with collateral.

These losses are spread across all lenders on the platform.

This causes losses for all lenders, and if such liquidations are repeated, the losses can be significant.

Lenders should consider the following: Risk of exploitationThis is when all tokens are loaned and temporarily unwithdrawal is not possible.

In addition to these risks, both lenders and short sellers should be aware of the following: Oracle RiskThis is caused by an incorrect price oracle.

On the other side

Short selling is risky. It is important for short sellers to only put up collateral that is equal to the amount they can afford to lose.

Lenders must be aware that they too are exposed to the risk of losing all of their capital.

Why this matters

Understanding the risks of shorting meme coins on platforms like Dumpy.fun is essential for both traders and lenders in the volatile cryptocurrency market. Knowing these risks can help traders manage their collateral more effectively and avoid significant losses.

Learn more about Meme Coin volatility:
Meme coins have increased the impact of market corrections this cycle.

Learn more about Solana ETF Outlook:
SEC OKs Solana, But SOL ETFs Are No Longer a Thing – Here’s Why

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Defi Surges, BTC Swings & Tradfi faces freezing: Daily encryption failure

August 28, 2025

Keepsolid launches KS COIN: Loyalty encryption through actual utility token benefits

August 14, 2025

XRP struggles for $ 3: Do Whale Offroads attract it lower?

August 7, 2025
Add A Comment

Comments are closed.

Recent Posts

Are you ready to token everything?

September 1, 2025

Sign Up And Get $500, Ushering In A New Era Of BTC, XRP, And DOGE Cloud Mining

September 1, 2025

Turning Social Hype Into Token Allocation

September 1, 2025

InFocus Launches Digital Ventures Strategy With Mythos Group To Push Into Blockchain, AI And Bitcoin

September 1, 2025

WorldShards Announces Partnership With ByBit And TGE Date

September 1, 2025

EcoSync & CarbonCore Launch Full Stages Refi Infrastructure Linking Carbon Credits With Web3

September 1, 2025

NFT sales in August increased 2.78% in July 2025

September 1, 2025

Bitcoin Price Posts for 5 consecutive August losses: Will Michael Saylor react?

August 31, 2025

Metaplanet’s bitcoin strategy is having trouble with stock plummet in the crisis of financing.

August 31, 2025

Next chapter of ecosystem support program

August 31, 2025

Ether Lee (ETH) tests major support for $ 4,453 after the highest rejection.

August 31, 2025

Crypto Flexs is a Professional Cryptocurrency News Platform. Here we will provide you only interesting content, which you will like very much. We’re dedicated to providing you the best of Cryptocurrency. We hope you enjoy our Cryptocurrency News as much as we enjoy offering them to you.

Contact Us : Partner(@)Cryptoflexs.com

Top Insights

Are you ready to token everything?

September 1, 2025

Sign Up And Get $500, Ushering In A New Era Of BTC, XRP, And DOGE Cloud Mining

September 1, 2025

Turning Social Hype Into Token Allocation

September 1, 2025
Most Popular

Crypto Pundit says Cardano is competing with the XRP community, but why is ADA price struggling?

January 4, 2024

The UAE’s stable politics creates a cryptocurrency-friendly environment in the US, Komodo CTO says.

May 12, 2024

Mi Primer Bitcoin’s Global Expansion: Educating Thousands About Bitcoin (BTC)

August 19, 2024
  • Home
  • About Us
  • Contact Us
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions
© 2025 Crypto Flexs

Type above and press Enter to search. Press Esc to cancel.