On Thursday, an enthusiastic crypto trader purchased over $9 million worth of Solana meme coin Dogwifhat (WIF) on that single day.
However, because of the low liquidity levels in the token and how decentralized exchanges work, the trader ended up with grossly inflated prices and lost approximately $5.7 million in slippage.
The trader carried out three different orders valued at $6.25 million, $1.78 million, and $893,000, respectively. By placing these gigantic orders on the relatively modest Dogwifhat trading pool, the purchases almost literally raised its price from about fifteen cents to as high as three dollars per token.
However, the buying spree did not last. As soon as a trader filled their order, the price rapidly fell again to the pre-pump price of around 15 cents. This left the trader with a large bag of Dogwifhat that was only about a fifth of what had been paid out for.
Slippage means the difference between the price at which an order is placed and its actual execution after the market’s movement.
Some have even said that this $9 million Dogwifhat trade might even be some sort of purposeful marketing stunt, considering how much attention and volume it brought to the once-unknown meme token.
Additionally, Dogwifhat trading volume exceeded $35 million on DEXs over the past 24 hours, and its market cap soared to $200 million.
This week’s $9 million slippage trade might have been painfully costly, but it served to emphasize how hype can still surround Dogwifhat.
Needless to say, the 70%Â price gain in the past 24 hours would be a good investment on the marketing part for someone willing to lose millions behind making more attention. For regular investors, it acts as an expensive reminder of how risky memecoin trading can be.
Also Read: Investor Hits Jackpot with Dogwifhat Memecoin on Solana Blockchain
