Self-salvation of blockchain when market crashes: From $LIBRA to revolution in native short-selling tools

1. $LIBRA plummet: a crisis of trust caused by insider harvest

On February 15, 2025, the meme coin $LIBRA endorsed by Argentine President Javier Milei staged an epic crash. The token price plummeted 96% from its peak of US$4.61, and its market value evaporated from US$4.5 billion to US$200 million, and it hit a trading volume of US$1.2 billion in just 4 hours.

According to Lookonchain monitoring, before 12 noon, eight wallets related to the LIBRA team extracted USDC and SOL from the exchange a few hours before the tweet was posted, and then sniped the chips instantly when the tokens were launched, and then sold in batches and increased by Liquidity, liquidity removal and claim fees received USD 57.6 million and 249,671 SOL (approximately USD 49.7 million), totaling approximately USD 107 million cashed out.

This collapse caused a large number of KOLs to suffer losses, and some people called for legal protection of rights, and some industry OGs believed that the industry would be "destroyed". But as fundamentalists of blockchain, we should think more: Can technology eradicate the greed of human nature? When regulation lags behind innovation, only more advanced tools can rebuild market equity.

**2. The industry paradox under Rug Pull’s rampantness: Crisis gives

rise to innovation**

In April 2024, there were 18 presale meme rug pulls on SOL, with an amount of $26.7M, and by May, there were 41 projects with a total of $102M.

Ironically, the industry did not die out, but instead gave birth to Pump.fun - a launch platform that became popular because of "the pool cannot be withdrawn". Its core logic is simple but fatal: by using technology to lock liquidity, leaving meme without rug behavior .

By June, due to the popularity of pump.fun, the ol presale meme that is prone to rug pulls has basically disappeared.

By July, Pump.fun's trading volume reached its first climax, with a single-day revenue of US$2.31 million in July, even exceeding Ethereum's daily revenue (US$2.29 million), becoming one of the biggest engines of this bull market.

This reveals a cruel truth: the market never rejects risks, but hates injustice . When fraud is rampant, users will vote with their feet, and the agreement that truly solves the problem will receive excess returns.

3. U.S. Stock Inspiration: How to Make the Market Healthier

The history of the development of traditional financial markets has provided us with important inspiration. The reason why U.S. stocks have become the world's most stable growth market is closely related to the mechanism that allows short selling. Short-selling funds represented by Muddy Waters** have squeezed out the "abscess" in the market through in-depth research and exposed the company's fraud (such as Luckin Coffee).

• The value of short selling :

  • Price discovery : Short forces balance market sentiment and suppress bubbles.

  • Market purification : Short sellers eliminate inferior assets by exposing fraud.

  • Long-term stability : After US stocks are allowed to short sell, market transparency and investor confidence have increased significantly.

The blockchain market also needs such a check and balance mechanism. Likwid can provide infrastructure for the emergence of the Web3 version of "Musty Waters" - through native short selling tools, insider players have nowhere to hide.

**4. The way to crack: How to end the insider hegemony by native short

selling tools**

If you want to cure the $LIBRA-style collapse, you need to disrupt the monopoly advantages of insiders from a mechanism. The existing DEFI leveraged trading products rely on oracles, which only support mainstream assets and cannot cover long-tail tokens.

Likwid 's answer : Build a native short-selling protocol based on Uniswap v4 without permission.

• Technical kernel : Through the formula (x+x')(y+y')=k, lending and trading are unified, allowing users to establish short positions at the moment of token launch.

• Anti-manipulation design :

  • Cutoff oracle : set a limit on price fluctuation in each block to eliminate flash loan sniping (Uniswap proposed in 2020, Likwid was the first to be implemented).

  • Dual liquidation model : combines the "repayment-based" and "Swap-based" liquidation mechanisms to solve the problem of large-scale liquidation of tokens and protect the interests of LPs.

  • Dynamic rates : Redistribute arbitrage profits to liquidity providers (LPs), not MEV robots.

Effect verification :

• Sniper Insider Player : If Likwid exists, users think that the price is overvalued and can establish short positions before the $LIBRA Insider Player sells. If the insider Player sells, users can earn short profits.

• Healthy Price Discovery : Short power naturally suppresses bubbles and malicious manipulation, reducing the vicious cycle of "pulling the market is like smashing the market".

• LP income revolution : triple income from handling fees, leveraged interest, and liquidation fines, attracting funds to settle.

5. The ultimate form of the Web3 market: Tools are order

From Pump.fun to Likwid, the evolutionary history of blockchain proves that every crisis is a catalyst for technological leap . When traditional finance relies on law and regulation, Web3 chooses to rebuild trust with code.

At present, the likwid test network has been launched and users are given a lot of incentives to test networks. You can follow likwid Twitter to get relevant information. Click the link below to explore the first non-audit leverage trading platform of web3:

https://likwid.fi/

Conclusion: No need to wait for the savior, code is justice

The collapse of $LIBRA is not the end point, but the starting point of the new paradigm. When the tools are strong enough, insider hegemony will eventually be disintegrated - this is not idealism, but the inevitability that Pump.fun's average daily trading volume of 200 million yuan is predicted by Likwid's acquisition of Uniswap Grants.