2023-05-09 17:39:46
A crypto trader paid $120,000 in gas fees to buy $156,000 worth of the meme coin called FOUR. Your calculations are correct, your position is winning.
There is a very strange underground community within crypto, where traders virtually trample each other on the Uniswap decentralized exchange (DEX) issuance of a meme coin. These users take advantage of the fact that decentralized exchanges work in such a way that, with low liquidity in popular projects, early entrants can buy even more drastically cheaper than those arriving even half an hour later.
In this subculture It is also unusual for a trader on Monday to pay 64 ETH (regarding $120,000) in transaction fees to buy 84 ETH (regarding $156,000) worth of a new memecoin called FOUR. The gas fee is paid by the users to the miners/validators. In general, the faster you want a transaction to be executed, the higher the gas fee you have to pay to the validators.
An explanation for the strange transaction quickly arrived on Twitter: a user named Flur pointed out that the mysterious buyer was able to buy the FOUR token second thanks to the huge gas fee, so at the time of writing the tweet, he was in profit of 133 ETH.
According to DEXTools FOUR’s trading volume was $113 million on the first day of trading, and their market capitalization is currently around $30 million. An analysis of blockchain data shows that early FOUR buyers made between $240,000 and $2 million in profits on average, which explains why they were willing to pay extreme gas fees for future profits.
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