$14M Worth of $MELANIA Tokens Sold in Ongoing Liquidity Strategy: What It Means for the Market

The $MELANIA token project has been making waves over the last month, not only for its branding but also for an extremely well-coordinated liquidity strategy.

That has seen over $14 million worth of tokens sold through a combination of community and liquidity allocations. This ongoing operation reflects a calculated and well-managed appearance of liquidity that has been used to raise a significant amount of capital. But it also raises important questions about what sort of appearance of liquidity is being given, what sort of capital is being raised, and how these two operations might affect the project’s price going forward.

The project confirms through on-chain data that total sales of 20.5 million $MELANIA tokens have occurred to date, with this bringing in an approximate total of $14.06 million. The average sale price for the $MELANIA tokens, we find, stands at $0.686 per token, with all tokens sold to date distributed via a configuration of interconnected wallet clusters tied to both community and developer-controlled liquidity pools.

They have structured the token sales into two primary categories: community allocations and liquidity allocations. Each has followed a similar pattern. They have been selling $MELANIA for SOL (Solana), then adding unilateral liquidity to the decentralized exchange Meteora.

From the community allocation, 10.5 million MELANIA tokens were sold in exchange for 44,013 SOL. These tokens were first distributed to four wallet addresses, which were then used to sell the tokens in batches. The proceeds in SOL were subsequently redistributed and stored across nine different wallets, presumably under community or project control.

Conversely, the liquidity allocation divested another 10 million $MELANIA tokens for 57,407 SOL. This time, the offloading was a little more coordinated, with the tokens going to five wallets set up for the job. As with the community allocation, the SOL from these sales is safely stashed across another five wallets.

In both cases, the method indicates a non-aggressive, controlled way of selling. This is apparently aimed at avoiding dramatic slippages while building liquidity on-chain. However, the use of multiple wallets, along with a seemingly structured way of flowing funds, has some in the community raising concerns about transparency.

Crucially, the sales are still going on. On-chain analysis shows that just two hours ago, a further 4 million $MELANIA tokens (around $1.72 million) were transferred to a new address. From there, a separate transfer added 1.2 million $MELANIA tokens (about $0.52 million) to a single-sided liquidity pool on Meteora, a well-known decentralized exchange on the Solana network.

The liquidity addition on only one side is a significant concept. It is different from the traditional way of providing liquidity, where one has to pair two different assets (think MELANIA-SOL). Here, one deposits only the corresponding asset—in this case, MELANIA—into the trading pool. As users trade against this pool (MELANIA-SOL), what’s actually happening is that the project is divesting MELANIA tokens in an amount and manner that more or less mimics what would happen if market-making activity were, well, making markets.

This mechanism ensures that there is enough liquidity for users who want to enter my stream of token sell pressure, which will, at least in the short term, continue to exist.

Even though the strategy focused on liquidity has gathered millions in SOL and ensured the token could be accessed on-chain, by not simply selling MELANIA, it has created an impression that the project might be consistently selling into the market. And if that isn’t a nasty enough picture, it could get uglier still, as the traders and holders with a more or less long-term outlook on the project seem to be placing considerable stock in the activity of the project’s wallet.

Opinions in the community vary. Some admire the clarity of the liquidity strategy and the fact that there have been no unexpected token dumps, while others are worried about just how many tokens are flowing through—and presumably to—the developer wallets that are so well known. There are also questions about why vesting and emission schedules aren’t being more clearly communicated.

At present, MELANIA manages to attract notice not only as a high-profile-name memecoin but also as a project that is implementing one of the more organized liquidity strategies seen in new coin launches recently. It is yet to be determined—future data will tell us—what sort of staying power MELANIA will have as a viable token versus being a briefly attention-getting token, especially because it is now entering the phase where tokens locked during the presale are being unlocked.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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