What is Dump?
Let's find out Dump meaning, definition in crypto, what is Dump, and all other detailed facts.
A dump is a process in which a massive amount of cryptocurrency is sold off in fast succession, and in some occurrences, these sell-offs will influence the decrease of the particular asset. This is usually done by a whale.
An actual dump can also be associated with the quick disposal of consumers' own cryptocurrency assets in order to benefit quickly. Furthermore, the phrase is frequently associated with a pump-and-dump method. This method is always related to deceptive conduct and an effort to control the price of a coin artificially.
For instance, a popular illustration of a dump and the impact it may have occurred in December 2017. Charlie Lee, the inventor of Litecoin, sold a significant quantity of LTC citing fears that it constituted a conflict of interest.
Initially, the markets appeared unconcerned with the situation. Nonetheless, LTC plummeted down a red line and lost over 50% of its value over the span of a few days. As a result, it took several weeks to regain the lost funds.
Additionally, a 2018 research looked at the incidence of pump-and-dump strategies in the cryptocurrency market. Over the course of six months, investigators observed two prominent group-messaging sites used by cryptocurrency enthusiasts and discovered nearly 3,400 such scams.
The SEC’s Framework for “Investment Contract” Analysis of Digital Assets has established a way to register tokens of blockchain projects as securities. The framework provides conditions of compliance for the projects to ensure they adhere to the regulations.<\/p>\n<p>If a project wants the token to be considered as a security, it must ensure that the asset offers real-world utility and profit for the investors and token holders. Furthermore, the project must be completely <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-decentralization/">decentralized. The SEC will only consider tokens as securities if they meet these requirements.<\/p>\n<p>The two-token economy model also allows projects to incentivize the investors and token holders. They may offer more perks than their competitors. The dual-token model helps ensure better features, functionalities, and upgrades for the end-users.<\/p>\n<p>Some of the projects that utilize the dual-token economy system include <strong>MakerDAO<\/strong>, Centric, and Anchor. One of the best-known two-token systems is the Ethereum-based <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-non-fungible-token-nft/">NFT gaming project Axie Infinity. The project relies on two tokens - <strong>SLP<\/strong> and AXS.<\/p>\n<p>The SLP token, which stands for Small Love Potion, acts as the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-utility-token/">utility token<\/strong><\/a>. It allows players to complete in-game activities. Using SLP, they can purchase or breed Axies, the in-game pets.<\/p>\n<p>AXS is the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-governance-token/">governance token<\/strong><\/a> with a <strong>capped supply<\/strong> of 27 million. It provides both players and investors with the ability to buy or trade the tokens on crypto exchange platforms. The AXS token also allows holders to participate in in-game governance. Holders are able to <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-staking/">stake the tokens on the platform which yields them passive rewards.<\/p>","definition":"a crypto project that utilizes two tokens. One token is used to fulfill certain activities within the blockchain network. The other token serves as a security to raise funds for the project.","status":"published","meta_title":"What is Dual-Token Model (Two-Token Economy)? Definition & Meaning | Crypto Wiki","meta_description":"Dual-Token Model (Two-Token Economy) meaning: Dual-Token Model (Two-Token Economy) - a crypto project that utilizes two tokens. One token is used to fulfill certain activities within the blockchain network. The other token serves as a security to raise funds for the project.","meta_keywords":null}"
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current-chapter="D"
current-section="what-is-dump">