Suppressing circulation is beneficial for these projects, making price manipulation easier.

Author: Mosi

Translated by: Deep Tide TechFlow

In the token space, perception is everything. Much like Plato's "Allegory of the Cave," many investors are trapped in shadows—misled by distorted value projections from bad actors. In this article, I will reveal how some venture capital (VC) funded projects systematically manipulate their token prices through the following means:

• Maintaining a false float as high as possible.

• Suppressing the real float as much as possible (to make it easier to pump the token price).

• Leveraging the fact that the real float is extremely low to drive up the token price.

Shifting from the "low float/high FDV (fully diluted valuation)" model to the "false float/high FDV" model.

Figure: No! I am not a low float/high FDV token! I am "community-first"!

Earlier this year, the popularity of memecoins surged, pushing many VC-backed tokens out of mainstream visibility. These tokens are referred to as "low float/high FDV" tokens. However, with the launch of Hyperliquid, many VC-backed tokens became difficult to invest in. Faced with this situation, some projects did not address the flaws in their token economic models or focus on developing real products, but instead chose to double down on artificially suppressing circulation while publicly claiming the opposite.

Suppressing circulation benefits these projects as it makes price manipulation easier. Through behind-the-scenes transactions—such as foundations selling locked tokens for cash and then repurchasing them on the open market—capital efficiency can be significantly improved. Additionally, this practice poses great risks to short sellers and leveraged traders, as the low real float makes these tokens highly susceptible to price pumps and crashes.

Next, let's look at some real examples. This is by no means an exhaustive list:

1. @MANTRA_Chain This is the most obvious example. For those curious about how a project with only $4 million total locked value (TVL) can have a fully diluted valuation (FDV) of over $10 billion, the answer is simple: they control most of the $OM float. Mantra holds 792M $OM in a single wallet (90% of the supply). It's not complicated—they didn't even bother to spread this supply across multiple wallets.

When I asked @jp_mullin888 about this, he claimed it was a "mirror storage wallet." This is complete nonsense.

So, how do we know the real float of Mantra?

We can calculate it as follows:

980M (circulating supply) - 792M $OM (controlled by the team) = 188M $OM

However, this number of 188M $OM may not be accurate either. The team still controls a significant portion of the $OM, using these tokens to sybil attack their own airdrop, further extracting exit liquidity and continuing to control the float. They deployed about 100M $OM for sybil attacks on their own airdrop, so we also need to deduct this portion from the real float. More related information can be viewed here:

Ultimately, we arrive at a real float of… drumroll… only 88M $OM! (assuming the team does not control more supply, but this assumption is clearly unreliable). This means Mantra's real float is only $526,000, a huge discrepancy from the $6.3 billion shown on CoinMarketCap.

The low real float makes it easy to manipulate the price of $OM, while also easily liquidating any short positions. Traders should be fearful of shorting $OM, as the team controls most of the float and can easily pump or dump the price. This situation is akin to trying to bet against @DWFLabs on some shitcoin. I suspect that the current price movements may involve Tritaurian Capital—this company borrowed $1.5 million from @SOMAfinance (@jpmullin888 is a co-founder of SOMA, and Tritaurian is owned by Jim Preissler, who is the boss of JPM at Trade.io)—as well as some funds and market makers from the Middle East. These operations further compress the real float, making calculations more difficult.

This may also explain their reluctance to release airdrops and their decision to implement lock-up periods. If they did conduct airdrops, the real float would significantly increase, potentially leading to a sharp price drop.

This is not some complex financial engineering, but it appears to be an intentional plan aimed at reducing the real float of the token and driving up the price of $OM.

2. @movementlabsxyz: During the airdrop claiming process, Movement allowed users to choose one of two options: claim the airdrop on the Ethereum mainnet (ETH Mainnet); or claim the airdrop on their yet-to-be-launched chain for a small reward. However, just hours after the claiming opened, they took a series of actions:

• Added a fee of 0.015 ETH (about $56 at the time) plus Ethereum gas fees for all users claiming on the Ethereum mainnet, which deterred many small-balance testnet users;

• Reduced the allocation on the Ethereum mainnet by over 80% while still retaining the aforementioned fee;

• Stopped the claiming process;

• Limited the claiming time to a very short period.

The result is clear: only 58.7 million MOVE were claimed. That is, out of the originally planned 1 billion MOVE, only 5% were successfully claimed.

Next, let's perform the same calculation for MOVE as we did for Mantra. According to CoinMarketCap, MOVE's reported circulating supply is 2.45 billion (2,450,000,000).

However, based on Move's pie chart data, there should only be 2 billion (2B, foundation + initial claims) tokens in circulation after the airdrop. Therefore, suspicious operations are already starting to appear here, as there are 450 million (450,000,000) MOVE that cannot be explained.

The calculation is as follows:

2,450,000,000 MOVE (reported circulating supply) - 1,000,000,000 MOVE (foundation allocation) - 941,000,000 MOVE (unclaimed supply) = 509 million (509,000,000) MOVE, or $203 million of real float (REAL float).

This means that the real float is only 20% of the reported circulating supply! Additionally, I find it hard to believe that every single one of these 509 million MOVE is in the hands of users, but setting that aside, let's assume this is the actual real float.

So, what happened during this period of extremely low real float?

• Movement paid fees to WLFI, requesting them to purchase MOVE tokens.

• Movement paid fees to REX-Osprey, requesting them to apply for an ETF for MOVE.

• Rushi (the relevant person in charge) went to the New York Stock Exchange (NYSE).

• Movement engaged in a series of complex operations with funds and market makers, selling locked tokens to them in exchange for cash, allowing these institutions to bid and drive up prices.

• The team deposited 150 million (150,000,000) MOVE tokens at the price peak on the Bybit platform. They may have started selling off from the price peak, as the token price has been declining since then.

• Around the token generation event (TGE), the team paid a Chinese KOL (key opinion leader) marketing agency $700,000 monthly to get listed on Binance, thereby gaining more exit liquidity in the Asian market.

Is this a coincidence? I don't think so.

As Rushi said:

Kaito:

@Kaitoai is the only project on this list with a real product. However, they also engaged in similar behavior during their current airdrop activity.

As noted above by CBB, Kaito distributed their airdrop, but only a small portion of people actually claimed it. This also affects the real float. Let's calculate it:

According to CoinMarketCap, Kaito's circulating supply is 241 million (241,000,000), with a market cap of $314 million. I assume this number includes: Binance holding users, liquidity incentives, foundation allocations, and initial community and claim shares.

Let's break down these numbers to find the real float:

Real float = 241,000,000 KAITO - 68,000,000 (unclaimed amount) + 100,000,000 (foundation holdings) = 73 million (73,000,000) KAITO

This means the market cap corresponding to the real float is only $94.9 million, far below the value reported by CMC.

Kaito is the only project on this list that I am willing to trust to some extent, as they at least have a revenue-generating product, and to my knowledge, they have not engaged in as many suspicious operations as the other two teams.

Solutions and Conclusion

1. CMC and Coingecko should list the real float of tokens, rather than the unreliable numbers submitted by the teams.

2. Exchanges like Binance should actively penalize such behavior in some way. The current listing model has issues, as you can simply pay a KOL marketing agency to boost participation in Asia before the TGE, as Movement did.

3. Prices may have changed by the time I wrote this article, but for reference, the prices I took are: Move at $0.4, KAITO at $1.3, and Mantra at $6.

4. If you are a trader, stay away from these tokens. Because these teams can manipulate prices at will. They control all the float, and thus control the flow of funds and token prices. (Not financial advice, NFA)

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