Throughout the past few weeks, hordes of retail investors have been lured into the DeFi sector by the massive gains posted by many of the crypto assets residing within this fragment of the crypto industry.
As many of these tokens start seeing slowing growth, return-hungry investors are now turning towards unconventional methods of getting the returns - and dopamine - they desire.
These traders are using Uniswap - a decentralized exchange - to trade a plethora of different ERC-20 tokens with tiny market caps, causing many of them to see surges of 1000% or more.
Crypto traders pump micro-cap tokens as their hunger for high returns grows.
Uniswap has been garnering growing utility throughout the past few months due to it being one of the only places to access many popular DeFi crypto tokens.
Many of these newly minted contracts are scams, in which the creator uses a standard ERC-20 contract to issue the token, fills the liquidity pool with ETH, and then pulls all the money out once some investors jump in.
Despite being absolutely useless and non-unique, some of the issued crypto tokens that aren't scams have posted massive returns due to them going viral amongst investors.
One such ERC-20 - named "Retard Token" - posted a 20x return following its creation, with investors pouring in money due to its "Meme potential."
There are countless other examples of this, and most people trading these tokens simply have a goal of exiting their positions before everyone else does.
In many ways, the crypto trading activity seen on Uniswap presently is strikingly similar to that seen in late-2017 - during which time catchy logos and clean websites were the most crucial factors weighed by investors.
Uniswap mania: Crypto investors chase massive gains as hundreds of new tokens surface
Published on Aug 2, 2020
by Cryptoslate | Published on Coinage
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