Following allegations of a potentially orchestrated price surge, major cryptocurrency exchanges Binance and Bitget have initiated investigations into the trading activity surrounding RaveDAO's RAVE token. The claims, brought forth by on-chain analyst ZachXBT, suggest that insiders may have manipulated the market, resulting in a significant short squeeze that drove the token's value up by 4,500% over the course of a week. The token's rapid rise led to the liquidation of over $44 million in bearish positions, with the majority of these liquidations occurring in a single day. Notably, nearly 90% of RAVE's supply was held in just three Gnosis Safe wallets at the time, and millions of tokens were transferred to exchanges shortly before the price surge began.
RaveDAO, a Web3 project focused on electronic music events and blockchain-based ticketing, has stated that it is not responsible for the recent price action, but the concentration of tokens and the transfer of millions of tokens to exchanges before the surge have raised suspicions. The project's token, which had previously traded below $0.50, jumped to over $6 in a single day and peaked at a market value of over $6 billion before receding. A 'bait and liquidate' pattern has also been alleged, where visible transfers suggest selling pressure, drawing traders into short positions, only to have those tokens withdrawn as prices rise, forcing short sellers to buy back at higher prices.
While these claims remain unproven, the high concentration of supply suggests that such a scenario is possible. RaveDAO has announced plans to liquidate portions of unlocked tokens 'when appropriate' and is exploring models that tie team incentives to ecosystem growth, but has not committed to a specific mechanism or timeline.