MArginX swap

Hi guys !! (especially MarginX team : @orbitant …)

I’d like you to review MarginX statistics as they might be 100 % misleading, even could be considered as a pure scam at some point.

As you can see below, the $FX-related liquidity appears to be “exploding” after the end of april 2024.

However, as we can see below, most of this liquidity is… 100% illiquid. It’s consisting of memecoins which have less than 1$ of 24h-volume.

Beside having so many memecoin projects launched over $FX network at the same time, saturating the main project’s flows, this is a very big red flag for me and many outside-investors. We couldn’t do worse in terms of communication.

Would it be possible to automatically exclude from the top tokens and graphical statistics any token which volume is less than 1% of the $FX token volume ?

Regards,
@FrenchXCore

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@indra @zaccheah @orbitant @Danny @DavidK @Peng @BlueStitch

Yes, I couldn’t agree more. There should a criteria for including liquidity.

Hey lord Pundians, I have a different opinion, even small liquidity should be displayed as part of the tvl, user can filter accordingly to his/her preference.

This is standard practice on UniSwap and other major dexes.

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Hi,

Thank you for your feedback.

The sort (filter) feature is already in place under the token page [ Dashboard - MarginX ]

As for your suggestion on statistics, will explore in the future - as our dev team is working on other integration presently.

Cheers!

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Hi,

Yes. It is a very common feature on every DEX - where permission-less listing of tokens is being practice.

This also allows different trading strategies for some looking for riskier appetite (especially memecoins).

Cheers!

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I’m litteraly shocked by your answers… (“Others do have a very low standard, so do we…”)
IRL, this would expose any decent trading exchange to fraudulent charges.
Anyway, I can read between the lines. Hope others will be able too.

Regards,
FrenchXCore

Hi lord @FrenchXCore , trying to do a whitelist might be riskier to regulatory risk, imagine SEC asking why did u list A token NOT B token yada yada… Instead DEX want to stick to a marketplace model where they are just facilitating the flow.

In any case, I believe $BAVA will be on MarginX whether its permissionless or white list :smiling_face_with_three_hearts:

FrenchXCore isn’t talking about permissionless listing.

FrenchXCore was talking about the fake liquidity which I reported to the team 5 months ago.

Real liquidity is about ~$2.7m out of the stated $12m on the dashboard.

$9.3m fake liquidity is fueled by tokens with no actual value tied to it.

  • I thought this was quite obvious to anyone savvy enough.

These tokens are inflated value that is not tied to any of the main tokens with actual value.

How to replicate millions of inflated liquidity with only $10?

  1. Create Token A - Deploy 1% into liquidity with $5 value of $FX (CHOP/FX)
  2. Create Token B - Deploy 1% into liquidity with $5 value of $FX (BBX/FX)
  3. Token A + B = 99% of the rest is paired together (CHOP/BBX)
  4. Buy $1 worth of Token A + B in the pool paired with $FX in Step 1 & 2 and that $1 will increase the price by 10%.
  5. This 10% increase in price due to a $1 buy will boost the CHOP/BBX pair which will result in a 100-1000x more “inflated value”.

3 pools is all you need to do this.

  • Pool A (???/$FX) = 1% supply
  • Pool B (???/$FX) = 1% supply
  • Pool C (Token A / Token B) = 99% supply of both tokens

How?

  • because the creator is controlling 99% of the supply and a $1 buy in the 1% pool is enough to move the value by millions in Pool C.

This isn’t something new.

If I can spot it the moment it came out 5 months ago, I’m pretty sure more people can spot it, just like FrenchXCore did few days ago.


Part 2: Why is this bad and will this have ripple effects? Yes.

Did I mention that the one controlling the 99% pool can also game the point system?

I remember documenting a few addresses that did this - swapping Token A/B back and forth in Pool C can result in multiple $500k point PER SWAP.

Proof:

You can get Rank 1 with just $10 using the method above.

- As someone who was constantly rank top 3 in the point system doing real value swaps, this pushes me back.

Well, at least you learnt something new today for the readers. :wink:

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This is extremely well documented by @SCENE and is exactly what I meant.

I didn’t really care about the meme coins up to now : people like playing with that is fine with me…
However, it now impacts the project we put trust in, and could definitely imply regulatory issues or prevent a listing on a more serious exchange. And I noticed it just now because I had a little spare time in these troubled days…

Regards,
@FrenchXCore

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Here’s a breakdown.

The issue you think it is (MarginX and Joe):
Permissionless listing allows anyone to do the method above.

  • Permissionless listing is a must for a DEX, I totally agree.
  • However, this is not the actual issue.

Actual issue:
The dashboard is including tokens with inflated value.
The point system is including swaps with inflated value.

  • This is the main issue.

Solution:
The dashboard should be able to filter both inflated liquidity & swaps.

  • Counting only pools that have real value
  • Point system should exclude inflated swaps

This allows the permissionless listing feature to exist whilst ensuring only real value swaps into the point system and counting actual tvl.

With this, even if anyone try to abuse the inflated method above, it won’t affect both the dashboard value and the point system contributed by real traders. See how DeFiLlama does it.

  • Preventive measures is better than cure.

  • There you go, the issue and the solution.


P.S. There’s another separate issue with the point system that I reported few months ago also but I think we should solve the current one first.

Step by step and all for a better future of MarginX! :slightly_smiling_face:

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