Liquidity pool (Liquidity Pool) is an essential tool for trading tokens, through the AMM mechanism to trade tokens without a traditional order book, the market has a certain level of liquidity. However, this mechanism also provides opportunities for underground market manipulation by token developers (DEV) or large holders (Whales) where the unilateral liquidity pool dumping is the most common one, a dumping method, will be used, especially on some MEME coin markets such as $TRUMP, $LIBRA, Melania and so on. In this article, we will briefly introduce the specific steps of DEV’s unilateral liquidity pool dumping, as well as the principles, advantages, and identification and prevention methods.
I. What Are Unilateral Liquidity Pool Dumps?
There are a variant of the liquidity pool attack, known as unilateral liquidity pool dumping where the DEV or whales build a liquidity pool on the decentralized exchanges (such as Raydium), deposit a single kind of token (usually a target token they introduce or hold, such as $TRUMP), they do not create and provide a pair of tokens (such as SOL) and they organize the pool’s price interval at higher or lower than the market price. Through price pumping or market hype, they then attempt to drive the tokens price into the pool’s active range, enabling retail investors to purchase at high prices and allowing the alters to slowly offload their holdings as profit. The method is subtle and efficient, often applied in the MEME coin market as it has high volatility and a lot of retail investors.
II. Unilateral liquidity pool dumping, step by step
Here is the operational process dev used to dump the unilateral liquidity pool, with $TRUMP As an example:
1. Set up a Unilateral Liquidity Pool
In the initial stages: DEV creates a LP on Raydium, depositing only the target token $TRUMP, without including paired token (like SOL).
Price Range Setting: DEV sets the pool price range well above the current market price. Say the current market price of $TRUMP is 6 SOL; DEV sets the pool price range at $9-11 SOL.
Logic: The pool’s price range is set above the current market price, meaning it cannot process trades at the current price (basically it cannot accept buys below 9 SOL or sells above 11 SOL). This method keeps the pool idle until the price enters the target range.
2. Pump the Market Price
Step: The DEV uses either their own funds or tactics to manipulate the market (i.e., placing large buy orders, generating false trade volume, spreading good press, etc.), and pushes the price of $TRUMP until it reaches the price range on your pool (for example, 10 SOL).
Tools and Methods:
All they do is put a large buy order on Raydium or other DEXs to create the illusion of rising price.
Push false-positive news or FOMO messages on social media (Twitter, Telegram) to draw retail investors to chase the price upward.
Pump the trading vol using bots or multiple accounts, making the market look active.
Action: Go to the pool and enable it in order for it to become operational and thus allowing for follow up dump.
Used to Support Selling, Gradual Exit
At this point, when the price of $TRUMP is between the 9–11 SOL range, the pool is active, and the pool can create transactions. Individiduals may also buy $TRUMP as the price increases and trigger FOMO.
Trading Process:
Retail investors provide SOL to DEV’s pool to receive $TRUMP.
The $TRUMP in the pool “overflows” to retail investors and DEV’s pool gets their SOL in exchange.
Using the constant product formula X * Y = K, where X = the amount of $TRUMP and Y = the amount of SOL (K is a constant), each trade will shift the proportion of tokens available in the pool, thus enabling DEV to slowly sell their $TRUMP holdings.
Discreetness: This action does not show up like big sells on the market, but passes through the pool’s automatic system so that standard charts or order books cannot find it.
Crisis in the Middle of the Road, Stabilise the Price
To preserve the liquidity pool, DEV may continue to pump or keep the price in the 9–11 SOL range, making sure there are more retail investors to process trades in the pool.
During this time, trading fees are generated (usually 0.3%) and are rewarded to DEV to an extent, though the main income comes from dumping $TRUMP high for SOL.
If DEV rids all $TRUMP or the market begins to dwindle, they quietly remove themselves from the pool and take SOL profits with them.
III. What is Unilateral Liquidity Pool Dumping?
Principles
Unilateral Liquidity Pool Dumping Such a dumping strategy leverages the AMM of liquidity pools in the Solana ecosystem. Using the constant product formula X * Y = K, liquidity pools dynamically adjust prices and token ratios:
As someone buys $TRUMP (with SOL), the pool’s SOL increases, the $TRUMP decreases and the price goes up.
DEV puts the pool’s price range above the market price, so it activates only after price is pumped — just in time for retail investors to buy DEV at a high — some would say ridiculous — price.
Advantages
High Discreetness:
One obvious disadvantage of direct dumping (e.g. dumping in the market directly) is that it will show up on CLOB or chain transaction records, so it is easy to be found by retail investors or center score equipment (e.g. GMGN dashboards).
Transactions are processed within the pool in a way that it is difficult for a layman to realize what is going on, but this causing unilateral liquidity pool dumping, which is a part of the pool “overflow” mechanism.
Avoiding Market Depth Impact:
In contrast, unilateral pool dumping disperses token release over time rather than crashing immediate market prices. Large sell orders may empty market depth and crash market price, but liquidity pool dumping is gradual.
Utilization of Retail Investor Psychology:
Then the whales pump the price and create FOMO via hype, luring retail into buying at inflated prices, allowing for “harvesting” of profit.
Low-Cost Operation:
DEV can easily implement this strategy due to Solana’s low transaction fees and Raydium’s low pool creation costs.
IV. Sign of Unilateral Liquidity Pool Dumping
Unilateral liquidity pool dumping is stealthy, but there are ways to notify:
Monitor On-Chain Data:
Monitor transactions and holdings of whale wallets on tools (GMGN dashboards, Solana Explorer, etc).
Observe for large amounts of tokens suddenly moving in, and price ranges significantly above or below market price on pools.
Study the Trading Volume and Price Action:
When the price skyrockets with no true bullish news and trading volume is strangely correlated, this could be whales pumping.
If the price is stagnant in a range for a long period of time, and trading volume is exceptionally high this could be indicative of a whale dump through the pool.
Check Pool Data:
Check Unilateral Pools for the target token on Raydium for pools that have an aberrant price range (far above or below of what is expected).
Check the pool creator’s wallet address to see whether it belongs to a DEV or whale.
Watch Social Media and Very close Activity:
Stay away from the hype or “good news” on Telegram, Twitter, formatted especially for whales so they can create FOMO.
V. Case Study: $TRUMP Unilateral Liquidity Pools Dumps
Let’s say $TRUMP is currently worth 6 SOL, and DEV had of 10,000 $TRUMP and plans to dump at a peak price:
Step 1: DEV NEEDS to create a pool on Raydium, set a price for 9-11 SOL and deposits ONLY 10,000 $TRUMP.
Step 2: DEV pushes $TRUMP price to 10 SOL via buy orders/hype.
Step 3: Retail investors, noticing the price gets bid up, FOMO into buying $TRUMP, inputting SOL into the pool to get $TRUMP; DEV’s pool accepts SOL and only slowly overflows $TRUMP to retail investors.
Step 4: DEV keeps it at that price, it moves around 9–11 SOL, and it keeps dumping until they sell all 10,000 $TRUMP and sweeps a ton of SOL.
VI. Conclusion
The unilateral liquidity pool dumping by DEV is a hidden and high-efficiency market manipulation method, which takes advantage of the AMM mechanism of the Solana ecosystem and the FOMO psychology of retail investors. (1) DEV provides a unilateral pool with a price range above the market price; inflates the price to open the pool (2) retail investors buy at high prices to attract retail investors (3) gradually realize profit by unloading tokens. This ensures that detection through standard charts is difficult, but if investors analyze on-chain data, watch trading behavior, and observe community activity they can increase vigilance and reduce their risk. It is important to comprehend this technique’s principles, as well as its prevention strategies, in order to protect personal interests and to be able to participate rationally in the DeFi market.
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