Perspective: Currently, there are too many new project tokens, and liquidity providers only sell down to take profits, rarely placing orders to support the price, resulting in a significant overnight crash of meme coins.

BlockBeats News, October 11th, Founder of Mango Labs Dov (@dov_wo) stated on social media that currently, most liquidity providers are not "providing liquidity," but are actually market takers. They only passively take orders, almost never place limit orders, and use a time-weighted average price (TWAP) strategy to continuously dump the price from the opening, selling chips to retail investors entering. A new coin will stop actively providing liquidity about a week later, waiting for the project team to propose unwinding the liquidity.

Dov explained that the reason for this situation is that there are too many projects in the industry, and liquidity has a cost. Liquidity providers sell off continuously after the opening, enabling them to wait for the next project token to go online because the first week of each project is the most profitable. So many altcoins plummet 70%-80% in the early morning but only need tens of millions of dollars in trading volume.