SIREN, another leveraged scam

$SIREN, the token that launched on Binance Alpha and contracts during the "broccoli" era, which was speculated to be CZ's dog's name, has almost been forgotten.

However, just two days ago, when the whole internet was discussing its "surge," the total liquidation volume of this coin was only second to Bitcoin, ETH, and XAU, ranking fourth with about $23.25 million. If it weren't for Trump raising the volatility of gold again with TACO, SIREN would have been third.

The price of this coin once approached $5, corresponding to a market cap of about $3.675 billion, briefly squeezing into the top 30 of the total cryptocurrency market cap, surpassing established tokens like OKB and UNI.

In a sluggish market, this is not the first time we have seen such a phenomenon. $PIPPIN, $RIVER, $BEAT, $MYX... By sorting through the relevant questions about $SIREN, what kind of experience can we gain from these similar situations?

Is there a traceable "leverage scam"?

As early as March 5, @c_ckoko tweeted, "The $SIREN is clearly absolutely controlled, this is a way to harvest users across exchanges."

His tweet explained well how this "leverage scam" operates: the depth difference in the spot market of trading platforms can create significant volatility with a small amount of capital, affecting the price of Binance contracts for harvesting.

Moreover, as he suggested at the end of his tweet, the $SIREN contract price index was adjusted. At the time he tweeted, the influence on the $SIREN Binance contract price index was 50% from Gate spot, 12.5% from Kucoin spot, 12.5% from Binance contracts, and 25% from Binance Alpha. After two adjustments, the current contract price index proportions are 25% from Gate spot, 12.5% from Kucoin spot, 12.5% from Binance contracts, and 50% from Binance Alpha.

According to Arkham data, the $SIREN inventory on Gate was only 64,000 pieces on March 22.

In this case, a trading volume of $100,000 can create a minute candlestick with nearly 40% volatility.

From the perspective of open interest, $SIREN showed significant anomalies starting from February 8, with open interest that had long hovered around $3-5 million suddenly surging to $58.83 million.

Of course, abnormal signs do not necessarily lead to a specific inevitable result. After all, the chips are in the hands of the controlling dealer, and we cannot determine how the dealer will harvest.

Methods

First is the control of chips, hoarding a large amount of spot chips, and opening large long positions to push the price high.

On-chain analyst Ember (@EmberCN) aggregated the control situation of $SIREN and found that up to 88.5% of $SIREN is controlled by the dealer based on on-chain data. If we include the portion deposited by the dealer in CEX, this number would be even higher.

The above tweet also pointed out that DWF Labs might be the controller of this event, but DWF Labs co-founder Zac denied this claim in the group chat.

After pushing up the price, the dealer induces shorts and reverses to lay down short positions, making retail investors feel that the top of the phase is approaching.

From the fee rate chart above, we can see that starting from March 14, $SIREN frequently experienced high negative fee rates, with shorts continuously sending money to the dealer's long positions, which the dealer then used to further push up the price. In the early hours of March 23, Gate spot experienced a drastic fluctuation of 78% within 10 minutes, corresponding to a trading volume of only about $450,000, with $SIREN's price rising from $2.75 to nearly $5. This means that many people were liquidated.

At this point, $SIREN may not be over yet, because looking at it from a rigid perspective, the dealer can still close long positions and dump the spot, creating a crazy large bearish candlestick, and then close the short positions at a cost far lower than the opening of the shorts. By comparing the trends of $RIVER, $POWER, and $BEAT with $SIREN in one chart, it seems that $SIREN is still missing a final netting.

As this article is about to be published, the above speculation has been confirmed:

Conclusion

Regardless of whether the current market is depressed, the emergence of such harvesting schemes is always bad. Indeed, some trading experts can sip a bowl of soup from the dealer amidst the fog of information, but for the vast majority of retail investors, it is just a gamble with no fairness.

When such an obvious harvesting scheme briefly appeared in the top 30 of the cryptocurrency market cap, I can only sigh.