Ben.eth, $BEN, and $PSYOP: Understanding the Price Manipulation of $PSYOP
Understand the mechanics of liquidity pools and their impact on the price of $PSYOP token as we unravel Ben.eth's strategies and their consequences.
Crypto enthusiasts are no strangers to the exciting and sometimes tumultuous world of cryptocurrencies. Recently, the spotlight has turned to a pseudonymous NFT trader known as Ben.eth and the buzz surrounding his latest projects, namely $BEN and $PSYOP tokens. With drama unfolding, let's dive into the intriguing story.
Ben.eth, Bitboy, $BEN and $PSYOP: The Timeline
Ben.eth's first launched token $BEN. During the presale, approximately 60 ETH was raised. As the public sale commenced, the number of $BEN holders increased significantly, but unfortunately, the coin's price began to decline.
Shortly after, the popular crypto influencer BitBoy entered the scene acquiring the Ben Coin for an impressive sum of 1000 Ethereum. This move injected new life into $BEN, resulting in a substantial surge in price and pushing its market cap to a staggering $53 million.
Following BitBoy's involvement, Ben.eth made waves once again by announcing the launch of his next venture, $PSYOP. However, this decision sparked controversy due to the questionable launch mechanics. Investors were required to send ETH directly to Ben.eth, relying on trust as no contract had been deployed at the time. Despite this uncertainty, ETH poured into Ben.eth's wallet, accumulating around 3,800 ETH (equivalent to approximately $7 million) in just a matter of days.
Unfortunately, the launch of $PSYOP was met by a backlash from investors as they received fewer tokens than anticipated. This caused accusations of scam and demands for refunds. Other investors also suffered losses due to slippage during the token purchase on decentralized exchange. Although Ben.eth responded that only 10% of the $PSYOP tokens were initially distributed, and has plans to release the remaining supply at a later stage, the threat of a class action lawsuit emerged:
Is the story of Ben.eth, $BEN, and $PSYOP tokens over? Who knows... but there's a chance that the story is only starting. Let's first unravel why the launch of $PSYOP left so many people mad.
How Ben.eth Is Using Liquidity Pools to Control the Price of $PSYOP?
Let me quickly summarize how adding liquidity to Uniswap works. To add liquidity, you can visit Uniswap and navigate to the Pools tab. There, you have a few options: adding liquidity to the V3 liquidity pools or the V2 liquidity pools.
Uniswap V2 Liquidity Pools
Now, what's the difference? Let's start with the V2 liquidity pool and then move on to the V3. When you add V2 liquidity, you pair one token with another, typically $ETH with a newly created or desired token for liquidity provision, in this story it will be $PSYOP.
The key factor here is that one has to provide half $ETH and half $PSYOP, ensuring that the dollar value of $ETH matches the dollar value of $PSYOP. The aim of a V2 liquidity pool is to maintain a 50/50 balance. When someone wants to buy $PSYOP tokens, they put in some $ETH and receive $PSYOP tokens in return.
However, the price changes when transactions occur. This adjustment accounts for the fact that the pool should remain equal in value on both sides, adhering to the 50/50 split. When $ETH is removed from the pool and $PSYOP tokens are added, the price of $ETH relative to $PSYOP needs to increase to reflect the reduced $ETH supply. Nevertheless, the value of $ETH and $PSYOP should still be 50/50 in USD terms. The price adjusts automatically, following an underlying price curve based on the 50/50 split. Whenever someone adds or withdraws liquidity from the pool, the price responds accordingly.
Uniswap V3 Liquidity Pools
Now, let's discuss V3 liquidity pools. With V3, you can pair tokens and select a specific price range within which you want to provide liquidity. This means that liquidity will only be active within that price range. If the price moves outside of that range, the liquidity becomes inactive.
If both V2 and V3 liquidity pools are available simultaneously, and the V3 liquidity pool falls out of range, the router on the Uniswap Exchange's front end will automatically direct transactions through the V2 liquidity pool.
The purpose of this router is to optimize transactions, ensuring the most efficient pools are used to maximize token acquisition for the given amount of $ETH. It aims to minimize the price impact, which is the percentage that the price moves due to the transaction alone. For example, if the price impact is -3.70%, it indicates the amount the price moved solely because of the transaction.
Moreover, in V3, you can set single-sided liquidity. This means you can set a price range above or below the current trading price, allowing you to provide liquidity with only one token. For instance, if I set a lower price range than the current trading price, I would only provide $PSYOP tokens. In this scenario, when the price falls within that range, the $PSYOP tokens are sold for Ethereum. Conversely, if I set an upper price range, it would start selling Ethereum for $PSYOP tokens when the price reaches that range.
Liquidity For $PSYOP
When Ben.eth launched his token, he chose to use a V3 pool with a specific price range. This meant that once the price moved outside of that range, the liquidity pool he added would no longer be active. Unfortunately, Ben.eth did not add liquidity to V2 himself (although other traders did), and many traders were not using the Uniswap front end, which routes transactions through the most efficient pool.
To summarize what happened during the launch, some individuals were routed through a less efficient pool because they were using bots like Sonic Suite that default to the V2 pool when provided with a contract address. V2 pool had minimal liquidity, resulting in significant price impact.
When someone tried to add $ETH to the pool to acquire $PSYOP tokens, they found that there were so few $PSYOP tokens in the pool that they received a small amount for the $ETH they contributed. This made them feel deceived because they were routed through the wrong pool.
Now, you might wonder if it was Ben.eth's fault. Should he have added liquidity to both V2 and V3 as a precaution in case his V3 liquidity went out of range? Should he have anticipated that people would use bots that only route through V2? He could have taken better measures, but Ben.eth was trying to be innovative with his token launch. Unfortunately, this resulted in a negative reception from the community and a downturn in the launch.
.@eth_ben dude what the fuck happened??? Why am I only getting like 5 cents worth of $PYSOP for this!!!!!!— S117.eth 💖 (@S117doteth) May 19, 2023
YOU better send a refund back right now this is fucking insane I trusted you on this and this pool wasn't setup right and you should have fucking disabled it wtf wtf pic.twitter.com/GZJCOpL9Oa
Not only were people buying from the V2 liquidity pool, but many were also waiting for their airdrops. When people finally received their airdrops, the real challenges began. Ben.eth wasn't finished playing with liquidity games. As I explained earlier, with V3 liquidity, you can set price ranges and provide single-sided $ETH liquidity when the $PSYOP token's price is down, or provide single-sided $PSYOP liquidity when the $PSYOP token's price is up.
Ben.eth decided to add single-sided $ETH liquidity below the current trading price. His intention was to prevent those who received airdrops from immediately selling and causing a sharp price drop. By having $ETH liquidity available for buying $PSYOP tokens when the price drops, it reduces the price movement when people add $PSYOP tokens to the pool and withdraw $ETH since there is more $ETH available within that range.
Ultimately, this gave Ben.eth control over the chart.
What Is Ben.eth's Plan?
Ben.eth still holds ~90% of the $PSYOP token supply leaving the question of what he will do with it unanswered.
Let's not make assumptions about Ben.eth's actions. We simply don't know how he plans to handle this substantial portion of the token supply. We lack information about the timeline for these tokens entering the circulating supply, whether they will be added to the liquidity pool or distributed as bonuses to partners. The schedule and allocation of these tokens remain uncertain.
It's possible that he might choose to airdrop tokens to those who held the supply and refrained from immediately dumping them, as he previously stated. This could result in an additional supply entering the circulation.
Considering Ben.eth's significant Ethereum holdings, he has the ability to exert influence on the market and manipulate this token if he decides not to utilize that outstanding supply. He has the power to control the narrative, and given his intelligence, he could handle this situation in various ways. It's uncertain whether he will take a negative approach that could backfire or if this will turn out to be an exceptional success story.
Ben.eth’s Intentions Might Be Hidden In The Name
Amidst the frenzy, many are missing the underlying message behind it all. Psyop, short for Psychological Operations, refers to the use of various techniques and tactics to influence the attitudes, beliefs, and behaviors of individuals, groups, or even entire populations. Also known as psychological warfare, psyops employ psychological and informational strategies to shape perceptions, manipulate opinions, and achieve specific objectives.
It's important to note that psyops can be conducted in both overt and covert manners, depending on the circumstances and objectives. While military operations often employ psyops to demoralize enemy forces or win hearts and minds, governments may use similar techniques to shape public opinion or gain support for specific policies.
As @liamherbst_ suggest in this tweet that was also retweeted by ben.eth, Ben is possibly showcasing a profound idea—that everything is a psyop. From religious beliefs to fashion choices and political ideologies, someone or something that has captured our attention and shaped our perceptions.
To summurise the tweet – the secret to $PSYOP's success lies in Ben.eth’s mastery of the attention game. Ranking first on @nftinspect and receiving hundreds of likes on every tweet, Ben has achieved this feat by following a 4 C's framework. Additionally, various attention-grabbing tactics were employed, such as Ben facing threats of lawsuits, acquiring a Milady NFT, seeking assistance from @SHL0MS to create an illusion of a rug pull, and flaunting a luxurious dinner at Nobu.
Moreover, strategies involving the CRAZE, ALL CAPS TWEETS, airdrops, spam tweets, and endorsements from clickbait crypto Twitter personalities have all been employed to instill FOMO (Fear Of Missing Out) and entice people to join the ride. The element of Confusion was also utilized through a fake account posing as a dev to spread negativity and Beeple's provocative artwork that raised eyebrows and questions. The uncertain future rewards have kept everyone guessing, creating a sense of anticipation.
To Zero Or To Hero?
The story surrounding Ben.eth, $BEN, and $PSYOP tokens has captivated the crypto community with its ups and downs. Ben.eth holding a significant portion of the token supply and his intentions remaining unclear, the community is left wondering what his plan is and how it will impact the future of the tokens.
TO CELEBRATE THE $BEN DEAL CLOSING, I WILL BE AIRDROPPING 1% OF THE TOTAL SUPPLY OF $BEN TO $PSYOP HOLDERS ON FRIDAY.$BEN HOLDERS DON’T FRET, I WILL BE AIRDROPPING YOU 1% OF THE TOTAL $PSYOP SUPPLY.— ben.eth (@eth_ben) May 23, 2023
THERE WILL BE A CHANCE TO MULTIPLY THESE AMOUNTS IN THE COMING DAYS, IF…
You might grab some popcorn and watch the story unfolding or even decide to risk a portion of your portfolio (not financial advice) betting on the fact that both content creators are experienced in crypto and they would not risk their credibility by simply 'rugging' the projects when so many eyes are watching.