On-chain detective ZachXBT and $3.9 million worth of Meme coins: The dragon slayer turned into a dragon?

Author: Damilare Damidez , Crypto Analyst

Compiled by: Felix, PANews

Recently, there have been some inconsistent comments in the crypto community about the on-chain detective ZachXBT. Some people still regard ZachXBT as a righteous man, but some people think that the "dragon slayer" ZachXBT eventually became the "evil dragon". In response, encryption analyst Damilare Damidez issued an article to support ZachXBT and revealed the truth behind the controversy.

background

A few days ago, US President Trump launched his meme coin $TRUMP, and his wife soon followed suit. These events caused a lot of excitement in the market. Amid the meme craze, cryptocurrency trader Micki tweeted: “The busiest person in crypto over the next four years will be ZachXBT.”

ZachXBT is a prominent blockchain investigator known for working with institutions to track fraud on the blockchain. Regarding Micki's remarks, ZachXBT made some "complaints" and said that he did not receive any reward from them.

“One of my biggest regrets is not putting money first,” ZachXBT said. "I'm wasting my time on something like this (helping to recover funds) which brings me nothing in return at all and only distorts my view of doing good."

"In addition, a few months ago, the U.S. government suffered a hacker attack and lost 20 million US dollars. I personally helped recover a considerable part of the funds. But in the end, I personally did not receive any reward."

After these remarks were issued, it triggered the issuance of a token called "Justice for ZachXBT". The token name is ZACHXBT and was created by degen trader. ZachXBT was airdropped with 50% of the token supply (500,000 ZACHXBT).

Here’s how ZachXBT does this:

Increased liquidity by 50% :

ZachXBT adds his airdrop token to the single-sided liquidity pool on Raydium. The token’s market capitalization surged from $5 million to $80 million in two hours.

An hour later, ZachXBT withdraws liquidity:

• Initial withdrawal of 1.7 million ZACHXBT and 340 SOL
• Later, 89 million ZACHXBT and 15,771 SOL
• Total withdrawal: 91 million ZACHXBT and 16,111 SOL

The diagram below shows how single-sided pooling and liquidity extraction work:

When you provide unilateral liquidity for a certain token on Raydium, the platform will use the tokens you deposit to automatically purchase an equal amount of paired tokens, such as SOL, from the pool to form a balanced LP token.

When liquidity is removed, the fees you earn will automatically count towards your share of the pool. This means:

• When you withdraw liquidity, you will receive your tokens (e.g., your tokens and SOL) as well as the fees you earn in the form of additional tokens
• Based on the trading activity in the pool, these fees are paid in both tokens in the trading pair (such as your token and SOL)

Including donations, the total is 16,348 SOL (valued at $3.87 million).

ZachXBT transferred 16,348 SOL earned worth $3.8 million to another wallet.

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ZachXBT then sends it to Wintermute.

Lock the capital pool:

Subsequently, ZachXBT locked the liquidity pool and added 96 million ZACHXBT to it.

Additional Token Sale: ZachXBT also received 50% of the supply of another token, CRIME, which was sold for $57,000 (still in the wallet).

Why are tokens selling off?

The coin's collapse was not due to ZachXBT's actions, but due to FUD and traders' lack of on-chain knowledge. As soon as word spread that liquidity was being withdrawn, many people panicked and sold their holdings.

analyze

ZachXBT’s actions demonstrate a sense of responsibility:

• Rather than blocking the project, he increased liquidity and allowed others to trade
• The 10% withdrawal helped him gain financially, but many felt he deserved it
• Re-increasing liquidity without showing any sign of struggle

The controversy stems mainly from misunderstandings rather than bad intentions.

in conclusion

ZachXBT’s handling of $ZACHXBT tokens reflects a fair approach. The purpose of the token is to recognize his contribution, which he made without leveraging his influence.

ZachXBT is still a righteous man, not a villain. The market just needs more education about on-chain mechanics and liquidity dynamics.