Cryptocurrency exchange WazirX is introducing a series of measures to compensate users who lost money on volatile Shiba Inu (SHIB) trades. It was opened at a substantial premium price as compared to its current price. The company is introducing WazirX Airdrop and is also amending its platform to deal with initial crypto price volatility.
Like Dogecoin, Shiba Inu is also a meme coin, calling itself the “Dogecoin Killer.”
What exactly happened?
Within minutes of the launch, SHIB reached a peak price of Rs. 1660. However, its price had dipped to below one rupee an hour after the token was listed. Although only one SHIB was bought at the peak price, this is extremely volatile behaviour, a phenomenon marking the character of any cryptocurrency.
Nishcal Shetty, founder and CEO of WazirX, said that listing the meme token on his exchange which has a substantial base of novice crypto traders, has turned out to be an expensive lesson.
He further said, “Fluctuations are common. People who are in crypto understand this. In fact a lot of people trade in the initial hours of listing because they know there will be wild fluctuation.”
After this incident, the company introduced this programme for users who bought SHIB at an exceptionally high price and did not sell the token after its price achieved stability.
Under this programme, users who were impacted will be given WazirX’s utility token. This will be WRX equivalent to 25% of their loss every month for the next four months. Nishchal Shetty in his detailed blogpost about WRX Airdrop said that, “WazirX does not determine the price of the token. It is an open order book exchange on which prices are driven by demand and supply.”
Response of other crypto exchanges
Raj Karkara, Chief Marketing officer of crypto exchange ZebPay said, “Different countries and exchanges will often have price discrepancies. For sophisticated traders, its an arbitrage opportunity, but for most people, it can seem confusing and unfair. We try to list coins we feel sure will have long-term value, with Bitcoin and Ether our gold standard.”
What changes company is planning to prevent such incidents in future?
WazirX is making changes to its Rapid Listing Programme, SHIB was also listed under this program. Rapid listing relies solely on liquidity providers that the exchange ties up with for token going live. The platform is planning changes to this policy and will now also allow sellers to deposit tokens before allowing trades. This will ensure more liquidity in the market. They are also planning to warn users about expected 24-hour volatility on its webpage whenever a new token is listed. CEO further said, “we will continue to list meme coins if the community demands it. SHIB has one of the highest openings ever for a token and the exchange had not anticipated this level of demand.”
Other Crypto Exchanges where SHIB is listed
According to coinmarketcap.com SHIB token witnessed $1 billion+ trading volumes. On 10th May, 2021, Mumbai based Crypto coin DCX enabled a spot market for SHIB.