- CYBER, one of the less well-known crypto tokens, has appreciated among the most in the crypto ecosystem in recent weeks.
- Traders are paying as much as 2,000% annualized in fees to buy the tokens on margin.
- They run risk of being caught out; most market pumps are sold quickly amid a generally bearish environment.
There’s always a niche token pump in crypto circles if you search hard enough, regardless of whether bitcoin (BTC) is moving or not.
One example: The CYBER token of “Web3 social network” CyberConnect, which has a market cap of $113 million, according to CoinGecko and has more than doubled in the past week to post one of the biggest jumps in an otherwise flat market. Trading volumes have zoomed alongside. Some $225 million worth of the tokens exchanged hands in the past 24 hours across crypto exchanges, up nearly 10-fold from Monday’s $30 million in volumes.
And traders are so desperate to get a piece of the action, data shows they are paying more than 2000% to buy the tokens on margin.
But CyberConnect runs the risk of being the latest crypto fad. Similar projects, such as Friend.tech, which lets X personalities create token-gated chat groups, gained meaningful popularity only to see revenue drop 95% in just over three weeks.
CyberConnect lets developers create applications related to digital identity, content and friendships on the blockchain. It also offers CyberGraph, a smart contract to record users’ content and social connections, and CyberID, an ERC-721 token that represents a unique handle for user accounts within the CyberConnect ecosystem.
Funding rates, which are periodic payments traders on perpetual futures markets pay to their counterparties, have soared to as much as an annualized 2,190% on Bybit and Bitget and as high as 1,500% on Binance.
The rates are determined by the difference between spot and futures contract prices. When futures cost more than spot, traders with long positions pay a fee to traders with short positions. The positive funding rates for CYBER suggest speculators are bullish, and long traders are paying out.
Most of the trades are taking place on Binance, data shows, with the exchange accounting for 74% of all CYBER volume. This is followed by the Korean exchange UpBit, which traded $70 million worth of the tokens.
Friend.tech launched on Aug. 10 and racked up some 4,400 ETH (about $8.1 million) in trading volume on the first day, growing further as a slew of personalities outside of crypto circles on X, formerly Twitter, joined the platform and fueled its popularity.
Data shows transactional activity on the platform peaked at $16 million on Aug. 21 before slumping to just over $700,000 as of Thursday – a 95% drop. New users have stopped coming in, even as active usage remains the same over a weeklong period.
Edited by Sheldon Reback.
