Undervaluation of $RADAR and Market Makers' 'Vampire' Tactics

[TOTO]

Hello everyone! I’m back—it’s been a month since my last post here, so it’s time to push things forward again. In this post, I’ll continue to share my questions along with some relevant suggestions.

Today, I’ll be diving into the following topics:

1. The relationship between DappRadar’s brand influence and its token market cap performance
2. The impact of market maker strategies
3. The importance of community sentiment

The Connection Between DappRadar’s Brand Influence and Token Market Cap Performance

First, it’s important to recognize that DappRadar is a leading platform in the crypto industry. As stated on their official website: “We’re the #1 global NFT & DeFi dapp store.” They’ve received investment from prominent institutions like Prosus (Naspers Ventures), Blockchain com Ventures, Angel Invest Berlin, and NordicNinja VC, raising a total of $7.33 million. With over 40 employees and a monthly user base of 1 million, it’s clear that DappRadar is a strong company with a solid product, institutional backing, talented staff, a large user base, and significant industry influence. From any angle, this is a company worthy of long-term value investment.

Additionally, DappRadar is actively advancing its DAO initiatives, with a robust governance structure, legal support, and transparent financial reporting—all of which indicate stable development.

Given such impressive data and background, one might expect that investing in DappRadar’s token, $RADAR, would be a sound long-term decision. However, we face a stark reality: $RADAR’s performance has been dismal!

Looking at its valuation, $RADAR has a circulating market cap of only $4.7 million, ranking 1421 on CoinMarketCap. Considering that DappRadar is nearly the top platform in its field and has raised over $7 million, this market cap seems unreasonable.

Examining price fluctuations, since its launch in December 2021, $RADAR has plummeted by 94.01%, continuously hitting new lows. Such a significant and persistent decline is typically seen in failing, bankrupt, or even fraudulent projects—again, this is not reasonable. So where is the bottom? $0.003? $0.002? $0.001? I urge everyone to think about this.

As for empowerment, $RADAR has launched the PRO program, offering benefits to participants, which is a positive direction. However, it’s concerning that we see little to no promotion of $RADAR across media, KOLs, or YouTube channels. There’s even a lack of widely known buyback information; all communications seem confined to community forums, like a hidden treasure in a closed room that no one knows about, while the team appears reluctant to open the door.

On behalf of the community, I suggest that the team actively disseminate information about the DappRadar platform and $RADAR token. They should engage in regular media disclosures and outreach to expand community building, stabilize the value floor, and attract more investors to collaboratively drive the platform’s growth.

The Impact of Market Maker Strategies

Currently, our collaborating market maker is GSR, a well-known player in the industry that has provided services for several prominent projects. There are various market-making strategies, such as bid-ask spreads, algorithmic trading, high-frequency trading, and arbitrage. Based on our observations and available public information, it appears that DappRadar’s partnership with GSR is relatively straightforward. For example, it may involve issuing token loans and providing basic liquidity. The contract duration is typically six months, twelve months, or longer, depending on DappRadar’s needs. During this period, GSR engages in swing trading to generate profits, returning the tokens at the end of the partnership. We can see records of such activities on blockchain explorers, and earlier partnerships, like with Wintermute, followed a similar pattern.

This basic type of collaboration has significant downsides. Market makers don’t need to consider the impact of their pricing strategies on the project’s brand; they merely conduct transactions to profit, which can severely damage the brand value for genuine investors and the project itself.

In my first post, I detailed GSR’s aggressive sell-offs, and today I’ll again illustrate how GSR is undermining the value of $RADAR.

From March 10, 2024, to October 21, 2024, GSR transferred a total of 138,511,557.9 $RADAR tokens to OKX, with the price plummeting from $0.021 to $0.0037—an astonishing drop of 82.57% (to recover, the price would need to increase by 5.7 times). This drastic decline is alarming and has also shattered the two-year price floor of $0.004 maintained by Wintermute, while GSR continues to offload tokens.

How can we accurately demonstrate GSR’s sell-off? GSR has transferred a total of 138,511,557.9 $RADAR to OKX.

As of October 31, 2024, OKX’s balance shows 95,780,481.1 $RADAR, with the reduction attributed to withdrawals by MEV bots and other users. Therefore, our focus should be on the remaining balance.

A portion of OKX’s balance consists of holdings by exchange users. By making some simple calculations, we can estimate the following: Assuming that user holdings on the exchange are approximately 30% to 50% of the total, this amounts to about 28,734,144.33 to 47,890,240.55 $RADAR. Thus, GSR’s actual holdings on OKX are approximately 50% to 70%, which equates to roughly 47,890,240.55 to 67,046,336.77 $RADAR.

Since GSR has a cumulative deposit of 138,511,557.9 $RADAR, we can deduce that GSR has sold approximately 71,465,221.13 to 90,621,317.35 $RADAR.

Given that the selling has been ongoing, we’ll take the midpoint between the highest price of $0.022 and the lowest price of $0.003736, which gives us an approximate price of $0.025736.

This leads us to estimate that the total value of GSR’s cumulative sales is between 1,839,228.9 USDT and 2,332,230.2 USDT.

It should be clear to everyone that GSR has been aggressively offloading tokens, and the price continues to set new lows.

Returning to the OKX exchange, the depth chart reveals that the sell orders amount to 11.3 million, while the buy orders total only 1.63 million—a difference of about seven times. If the price collapses, it could lead to an endless downward spiral. We believe that GSR has not effectively managed the $RADAR token.

I hope these details will catch the attention of the DappRadar team. We are formally requesting for the second time that the team reevaluate GSR’s primitive, rudimentary, and aggressive “vampire strategy” market-making style. It’s crucial to instruct market makers to maintain at least basic strategic standards, provide ample liquidity, and uphold fundamental value performance. The ongoing relentless sell-offs must stop. In comparison, I believe Wintermute performed much better, but unfortunately, that partnership has ended.

The Importance of Community Sentiment

The community is vital for projects in the cryptocurrency industry. DappRadar has made commendable efforts in community building by establishing Discord and community forums, which effectively provide a platform for free expression and maintain a sense of order—this is a positive development.

However, since I posted an article a month ago, it seems the DappRadar team has not provided any feedback and appears to be avoiding the issues surrounding market makers and pricing. This is puzzling; I believe there should be proactive communication with the community. Whether the news is good or bad, it’s essential to confront it head-on, identify the reasons, and seek solutions.

We are community builders, DappRadar users, and $RADAR investors. Everything we do ultimately ties back to price, as price performance reflects the value of what community members are contributing.

I urge the DappRadar team to engage actively with the community and work together to build a better future.

[madeafterdeath]

hes made some soild points

Market makers killing us off???

[Alex-Mammoth]

Thank you, TOTO, for your article!

I’m adding some more data for objectivity to help everyone have the necessary information. Please find attached the google sheet that includes all RADAR token transfer transactions done by and to the GSR wallet from February 1, 2023, until November 1, 2024: GSR RADAR TXNS

For context, GSR wallet has deposited a total of 194,184,558 RADAR to OKX and withdrawn 106,034,286 from OKX since February 2023.

In October, GSR wallet deposited 32,658,557.93 to OKX and withdrew 6,146,525.78.

To all CEXs, GSR wallet had a total inflow of 357,863,433 and a total outflow of 286,332,581.

Note: I am not here to assign blame; this data is publicly available and can be accessed through the blockchain via Etherscan. My goal is to maintain a neutral tone and provide clarity.

You can go through different tabs of the sheet here:

[TOTO]

Thank you for the more comprehensive data presentation, but please pay attention to the details in the article and the actual market trends.

The significant drop really began on March 10-11, 2024, and the deposit time for OKX mentioned in the article is also March 10, 2024, not February 2023. Please keep this detail in mind.

Starting on March 10, 2024, GSR has been continuously transferring to OKX, totaling 138,511,557.9. However, as of the article’s publication, OKX’s balance is only 95,780,481.1. This balance must include some that OKX users hold; for example, my account holds a certain amount of RADAR. So, the actual GSR balance in OKX is less than 95,780,481.1.

When combined with the full-cycle data you published, the inflow of GSR across all exchanges is clearly greater than the outflow. Therefore, I can conclude that GSR is still continuously selling off.

This data is publicly available, and the blockchain explorer accurately records all processes.

[jojo]

I really don’t know what the team is doing.

Dappradar used to seem like a good project but now everything seems cheap and everyone doing a bludy part-time job.

Surprised to see someone raising serious proposal here. Thought here a silent tomb long time already.

[Powerman]

This is an excellent article, and I’m glad to see such professional investors sharing their insights in the community. I believe this represents the community’s voice to some extent. TOTO has effectively stated many facts that need to be addressed, and they are very urgent.

$RADAR is a project of high value, and we cannot let market makers and the team destroy it. We look forward to the team’s response.

[SkirmantasJ]

Thanks for raising concerns, we’re investigating this. Will come back with a response

[SkirmantasJ]

Okay, first of all - I appreciate community members asking questions, that’s how it should be done. Having said that, I believe we should look at a broader picture when talking about market makers.

1. Market makers operate on other CEXes too, not just on OKX

As Alex pointed out earlier, transfers to/from GSR wallet can be seen on Etherscan. Here’s a Google sheet with analysis of GSR <> CEX transfers in 2024, using Etherscan’s data.

Summary of GSR RADAR transfers in 2024:

It makes complete sense for a market maker to sell on one exchange and then buy on another. That’s pretty much what their business is about, so again, looking at just one exchange doesn’t make sense.

Overall in 2024, GSR has transferred 172M RADAR to exchanges and received 203M RADAR from exchanges. Quite contrary to what you see if you just look at OKX.

2. “82.57%” price drop

Let’s look at the chart below (taken from OKX)

Taking a day of the price spike and calculating a price drop from there won’t get us far. Price has dropped since, that’s a fact. We should be realistic and not use outliers for such discussions though.

3. Market makers are not just doing us a favor

It’s a business relationship—they’re in it to make a profit. The DAO has a loan agreement with GSR, and they need to trade actively to see returns. But that doesn’t mean they’re here to dump RADAR or mess with market stability—in fact, the data shows the opposite. There are different types of contracts for market makers (loan, retainer, etc.), and we can dive into that separately.

They are active on centralized exchanges to ensure there is liquidity for RADAR and prices on different exchanges don’t differ too much. Since they are not a non-profit organization providing a free service, their profits come from trading. Not the profits that were mentioned in the original post though, by far.

Conclusion

Other team members are still investigating the case to collect more information, but this early analysis does not show any wrongdoing from GSR side.

We also had a conversation with GSR about this situation and their strategies. There was no disagreement between our findings but we can’t share the details provided by them due to confidentiality agreements in place.

[TOTO]

Hello Mr. SkirmantasJ,

Thank you for your response. This is exactly what the community wants to see—our team is not avoiding the issue, and this is a sincere conversation, which is truly reassuring.

I agree with the market makers’ responsibility to profit, but the community is focused on the value floor of $RADAR. When Wintermute worked with the team, they successfully maintained a solid floor, which gave the community and the market confidence. However, GSR’s actions have undermined that, and this is one of the main reasons for the community’s dissatisfaction. We are not discussing whether the price should go up or down, but rather the issue of the value floor. I hope the team understands this and takes it into consideration when discussing fairness with market makers.

Another point is that the team doesn’t seem to have put much thought into marketing for $RADAR. Despite having a solid product, membership system, buyback plan, and DAO management in place, the community is excited about these, but it seems that the outside world is unaware of them. Does the team have any plans in this area? Of course, I understand that many things need to remain confidential, so there’s no need to share specific details— the community just needs some confidence.

[vandynathan]

As a follow up from @TOTO and @SkirmantasJ’s comments, we do want to thank our community for their continued engagement and for raising valid concerns regarding the recent price trends of $RADAR. We value your input and recognition of the great work completed thus far, and want to address these concerns transparently.

1. Market Context

Skirmantas mentioned the actual data points related to the market making activity, but it is also important that we recognize the price and market challenges faced by $RADAR – it’s clear market-wide conditions have contributed to declines in token values across the industry these past years. Our price trajectory, although impacted, does not deviate significantly from the performance observed in similar tokens.

2. Market Maker Strategy

DappRadar’s collaboration with GSR is structured to ensure liquidity and market stability. However, we have taken note of the community’s observations regarding GSR’s trading behavior and its impact on $RADAR’s value. We are actively discussing with GSR and will be as transparent as possible notwithstanding the confidentiality clauses. From our discussions, it’s looking to strike a balance between necessary liquidity provision, floor prices and strategic market-making practices.

3. Alternatives and Cost Implications

We are currently assessing the feasibility of alternative market making agreements with other partners. Our current arrangement with GSR is based on a loan agreement. Under this model, the token issuer provides a loan of tokens to the market maker, with the expectation that the market maker will use these tokens to provide liquidity and stability in the markets. In order to provide the community with a better understanding of the framework that we use when choosing our market making, please view the following:

Pros of Loan Agreement model

• Lower Upfront Cost: We loan RADAR tokens directly from our treasury instead of having to pay high monthly service fees and having to provide a large allocation of stable coins for the market marker to trade with.
• Incentive Alignment on Price Stability: Since the market maker holds a loan of RADAR tokens, they are incentivized to maintain a stable or growing price to protect their position’s value. We also have specific measures in place to align our incentives on price for the long-term.

Cons of Loan Agreement model

• Risk of Token Dumping: Market makers with a loan may still be incentivized to sell tokens aggressively, especially if they don’t have long-term price incentives or restrictions. (Again our team has strong incentive alignments in place for the long-term).
• Reduced Control for Issuer: Since tokens are with the market maker, issuers have less direct control over liquidity and distribution strategies.
• Alternatively, we could engage a partner to offer market making services based on a monthly service fee. In this model, we also need an additional budget in native tokens and stablecoins to be used for liquidity and spread management.

Pros of Monthly Service fee model

• Predictable Costs: Fixed monthly amount, allows us to know exactly how much the services will cost us over the life of the agreement.
• Clear Incentive for Activity: Market makers are directly compensated for their services, so they are incentivized to execute volume and trading strategies that benefit liquidity.
• Greater Control Over Token Circulation: This model provides more flexibility over how tokens are introduced to the market, as market makers don’t hold large inventories.

Cons of Monthly Service fee model

• Short-Term Incentive Focus: Market makers might be more incentivized to hit trading volume targets rather than maintain a stable price, potentially leading to price volatility.
• Higher Ongoing Costs and liquidity requirements: Monthly payments can become costly over time, and this model requires a budget of approximately $500k USD in stables to be allocated for trading activities.

We are weighing these options to ensure long-term value and stability for $RADAR.

5. Immediate and Long-Term Actions

• Short-term: Engage in discussions with GSR to adjust strategies, review trading practices, and assess liquidity provision.
• Long-term: In line with @TOTO’s points we were already assessing how to develop a robust strategy that includes media promotion of $RADAR, active community engagement, and leveraging additional partnerships for sustainable growth. This requires budgeting and also correct timing of the market.
  DappRadar DAO is not here for short-term artificial price increases but sustainable growth as seen by the DAO already being cost-positive when looking at it’s revenues and costs – a feat not many DAOs can boast of.

4. Next steps

Moving forward, we commit to more proactive and regular updates about market activities and strategies affecting $RADAR. Your trust is vital, and we aim to build that through consistent dialogue and updates. We’ll continue working together to achieve a brighter future for our community and the project.

[ayseguls]

Hello @TOTO

@TOTO

Another point is that the team doesn’t seem to have put much thought into marketing for $RADAR. Despite having a solid product, membership system, buyback plan, and DAO management in place, the community is excited about these, but it seems that the outside world is unaware of them. Does the team have any plans in this area? Of course, I understand that many things need to remain confidential, so there’s no need to share specific details— the community just needs some confidence.

Thank you for sharing your thoughts. We appreciate your commitment to DappRadar and understand the concerns you’ve raised above. Our team is constantly working on new ways to add value for our users and to increase the utility of RADAR within the platform. Let me give you an overview of some of the recent initiatives and our approach:

Focusing on Product Value and Benefits for PRO Users

We’re dedicated to enhancing the DappRadar experience for PRO users. Recently, we launched Boosting (announcement post here), a feature aimed at encouraging more users and developers to acquire and stake RADAR.

Additionally, we’ve been organizing PRO airdrops (listed here) to bring added benefits to our PRO members. While this process requires coordination with partners and some time to set up, we believe it will be well worth it for the community.

Experimenting with Marketing Strategies

Over the last three months, we had a collaboration with Lunar Strategy (here’s the final report of it), focused on expanding product exposure, working with KOLs, supporting partnership announcements and PR. We’ve learned a lot from this experience, especially in terms of optimizing budget allocation and planning our communications through KOLs. These insights will help us refine our strategy moving forward.

Also, we’re continuously assessing and adapting our social media strategy based on the data and benchmarking, ensuring our efforts are effective in reaching and engaging new users.

Adapting to Market Conditions

Given the market conditions over the past couple of years, we’ve been mindful of how we allocate resources, prioritizing product stability. While we’ve participated in events, even sponsoring them in the past, in the past two years during the bear market, we’ve had to be selective in our spending due to the uncertainty in the market.

We’re committed to monitoring the situation and will continue to make strategic decisions on budget allocation for the maximum impact on DappRadar, RADAR and DappRadar DAO.

Thanks again for your feedback. It’s great to see the passion in our community, and we look forward to continuing to build together. We will most certainly take your suggestions to heart as we move forward, and interest in dapps gains interest from untapped communities.

[madeafterdeath]

Market makers still killing us off???

4 days ago…last reply and people was not happy last night.

We had a another candle they was not happy about.

[Floran]

First of all, I would like to express my gratitude to TOTO for this article, which is extremely important. I hope it will serve as a catalyst for understanding our shared goals and recognizing that we are all “on the same ship,” with our primary objective being the stable growth of the project and the token.

I see that the topic of marketing has already been raised, but I couldn’t find clear information about strategic plans for further promoting the project. While there have been mentions of collaborations with certain influencers, as someone who actively researches the crypto market, I must point out that in recent times, I haven’t noticed significant informational presence about the DappRadar. This is a major issue because efforts aimed at development risk becoming ineffective without adequate promotion.

I want to emphasize that we need a clear, well-thought-out marketing plan. This plan should include collaborations with other projects, popular influencers, and more frequent AMA sessions to enhance the project’s visibility in the crypto space. Marketing is the key to moving the token out of a “stagnant state.” DappRadar is undoubtedly a promising project, but at present, it lacks sufficient recognition within the crypto community. While people may have heard of it before, many are unaware of its recent updates and developments. Meanwhile, competitors continue to advance actively.

Therefore, I urge us to focus our efforts on creating and implementing an effective marketing strategy that will strengthen the project’s position in the market.