Remember our nice bullrun that ended abruptly on 16th January?
Coincidentally, on 14th January Wagyu exchange was released to the world, with 20 million new XMR1 perpetual tokens to trade.
How is this connected? Surely perpetuals cannot affect the price of spot?
It affects the spot price, IF the market views XMR1 as trading the same as spot. If the price of XMR1 is trusted to be 1:1 with the price of XMR, any dump in XMR1 will be immediately arbitraged into XMR. When this is achieved, anyone can dump spot XMR price without ever owning any actual Moneros.
The more volume that trades on wagyu, and the more people arbitraging to spot XMR, the stronger this link becomes. This is not desirable for anyone hoping to raise the price of monero.
How do we fix it and return to setting the price with spot XMR?
- Buy XMR on WAGYU (or other custodial CEX)
- DO NOT SELL XMR ON WAGYU (or other custodial CEX)
This deprives them of the XMR pool they need to maintain XMR at 1:1 with XMR1. We free the captured moneros. Sell them on retoswap or bisq to improve the liquidity there, and also get a better price!
- (obviously) Do not leave your XMR on the wagyu exchange
The more we can do this, the more they will have to follow the price set by spot, and not the other way round. We can then resume our bull run. This CAN be done, we saw it in silver last year where the spot price separated from the paper silver price. Monero is a far smaller market than that.
Note 1: There are other custodial CEXs we should free moneros from too, just concentrating on wagyu as it seems like the recent culprit.
Note 2: It is interesting that ZachXBT was paid a large amount for his "investigations" around monero's price pump, by hyperliquid. Hyperliquid are also behind Wagyu.