Trader makes millions on New Year's Day? Revealing the market-making mechanism loophole behind abnormal token trading

Question

【CryptoWorld】A trader discovered an interesting event on New Year’s Day: the price of a token called BROCCOLI714 on a major exchange suddenly skyrocketed. By capturing this abnormal trading activity, he profited over $1 million.

After in-depth analysis, he found that behind this rapid price surge, there were大量现货买单在砸盘, with a quite aggressive scale. Based on trading logic, this seems more like a problem with a market-making program, causing abnormal order execution.

Later, an official from a major exchange clarified and denied the hacking incident. They claimed that the risk control system has been operating normally, and the entire process was within controllable limits. The exchange also initiated an internal review process to investigate what exactly happened.

This incident actually reflects some potential risks of the market-making mechanism in high-frequency trading. When large funds enter the market, if the program logic is improperly set or parameters are misconfigured, it can indeed lead to outrageous price fluctuations in a short period. For retail investors, this also serves as a reminder to be more cautious when trading abnormal tokens, as unusual price movements often hide risks.

OfflineNewbie · Accepted Answer

I'll just say it, I'm already tired of the exchange's usual rhetoric, like "risk controllable" and "system normal"... uh, so where did the one million USD come from?

Is a bug in the market-making process really different from being hacked? Anyway, it's all money gone.

This guy was still watching the market on New Year's Day. I'm really bad at this; he's making money, and I'm still losing my underwear.

The lesson now is, when the exchange experiences abnormal fluctuations, never listen to the official nonsense. Get on the train first and then talk.

It feels like the system is harvesting the leeks itself. As a pure retail investor, I don't even have the qualification to eat the dust.

RektRecovery · Answer

ngl this is exactly the kind of "oops our risk controls are fine" copium i've seen a hundred times before. mm algos go brr and suddenly it's "fully controlled" lmao

DataPickledFish · Answer

This kind of vulnerability is really incredible. If it were me, I would have rushed in already, haha.

As soon as the market maker code has a bug, retail investors can buy the dip and get rich. The exchange is still putting on a show.

Over 1 million just disappeared like that. The internal review at the exchange keeps investigating, but in the end, it's definitely "no such issue."

It's impossible for program errors to be completely controllable... They really dare to say that.

It's always "system normal" and "risk controllable." I'm tired of hearing these phrases.

ser_ngmi · Answer

Damn, it's the same "normal operation" system again, always the same excuse...

Alright, this guy did manage to catch the bottom, but the exchange's excuse-shifting this time is really top-notch.

Once the market-making algorithm goes off track, no one can escape, that's the charm of Web3.

Wait, so 1 million dollars just disappeared like that? Feels like the exchange should compensate.

0xTherapist · Answer

Wow, is the market-making mechanism really that flawed... A million dollars just went into the pocket like that?

Program bugs can really make people blood profit. The exchange says it's "within controllable range," but why do I find it so hard to believe?

High-frequency trading and abnormal orders again—I've seen this routine several times before.

Is the market maker's risk control system really just a decoration? I guess I need to be more vigilant myself.

MetaMasked · Answer

Oh no, another bug with the market maker? This time luck is really on my side, over a million dollars just slipped into someone's pocket like that, I'm jealous.

That's a bit outrageous, the exchange says it's nothing? So what does this "controllable range" refer to?

The program had a problem but still dares to blame risk control. Does this logic make sense?

Next time I encounter something like this, I also want to try it, but unfortunately I can't react that quickly.

The exchange's internal audit should give an explanation, otherwise it always feels a bit like a conspiracy theory.

BROCCOLI714, the name of this token, sounds a bit funny here.

Forget it, I’d rather play it safe and short. This kind of lucky catch isn't for me.

gas_fee_trauma · Answer

Program bugs can make millions, I also want such a "surprise"

Exchange: Risks are controllable I: I don't believe you

The market-making mechanism has such big loopholes, no wonder people are getting rich every day

It's another "internal review," but in the end, it's just "system normal" as always

Really relying on bugs to make a living, this circle is done for

DegenWhisperer · Answer

Damn, this guy's luck is incredible. He can profit millions by exploiting bugs in the code.

The exchange claims it's within controllable range? Laughable. That's the standard excuse for covering up bugs.

Market maker crash scene, truly blood-curdling.

Trader makes millions on New Year's Day? Revealing the market-making mechanism loophole behind abnormal token trading

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