Every Market Crash Liquidates Long Positions Worth Billions. Those Losses Are Our Gains.

We have a proven business plan that is already profitable: With our funds combined, we short excessively-hyped coins on Binance and other exchanges, forcing over-leveraged traders into liquidation. Each liquidation pushes prices further down, in turn causing more liquidations in a cascade that results in an avalanche of profits for our token-holders.

The value of the Liquidator token does not depend on marketing, celebrity endorsements, or banner ads. We don’t rely on trendy NFTs, Reddit spam, questionable memes, or aggressive Telegram bots with poor grammar. Instead, we harvest value from futures liquidations, using the same business model that makes Binance and its ilk so tremendously profitable. This value is extracted in the form of blue-chip cryptocurrencies (BTC, ETH, BNB, and USDC), which we then use to repurchase Liquidator tokens.

Liquidator is fundamentally different from other tokens in two important ways:

(1) Our token’s value rises without requiring others to purchase it;
(2) As liquidations tend to increase in number and value during broad downturns in the cryptocurrency market, our token serves as a hedge against market crashes and generates profit during times of widespread decline.

Read our whitepaper for more information. We do the math.

How To Trade Liquidator Token

Step 1: Install MetaMask

MetaMask is an open-source, industry-standard wallet suitable for trading Liquidator and other tokens on Decentralized Finance (DeFi) platforms. No other wallet has the same degree of independence, and MetaMask is continually audited by independent researchers.

MetaMask is a browser extension and is compatible with Chrome, FireFox, Brave, and Microsoft Edge. It operates on Desktop, Mobile, and Tablet platforms.

Be certain to back up your seed phrase in order to secure your Liquidator tokens and any other virtual assets you may store on MetaMask.


Step 2: Configure MetaMask for Binance Smart Chain (BSC)

By default, MetaMask operates on the Ethereum main network (“Beacon Chain”). In order to trade Liquidator tokens, you will need to adjust its configuration to support the Binance Smart Chain (BSC). Once so configured, you can easily switch between Ethereum and BSC, and securely store and trade assets on both networks. Follow these steps:

A. Open MetaMask, and select “Settings” >> “Add New Network”.
B. Set Network Name to “Binance Smart Chain”.
C. Set RPC URL to “https://bsc-dataseed.binance.org/”.
D. Set Chain ID to “56” (in base-10) or “0x38” (in hexadecimal or base-16).
E. Set Symbol to “BNB”.
F. Set Block Explorer to “https://bscscan.com”.

Once these steps are completed, select “Save”. You can now switch to the Binance Smart Chain in the drop-down menu at the top of MetaMask’s main screen. You may also view instructions on Binance’s website:


Step 3: Obtain BNB (Binance Coin)

Binance Coin (hereafter referred to as “BNB”) is issued by Binance, by far the world’s largest cryptocurrency exchange. It is also the native asset of Binance Smart Chain, serving the same functionality on BSC as Ethereum does on the Ethereum Virtual Machine (EVM). With a market capitalization on the order of $100 billion, BNB is a blue-chip cryptocurrency by any measure.

Liquidator tokens are priced in terms of BNB, and therefore BNB is required to purchase such tokens. You can purchase BNB directly on many exchanges. Alternatively, you may purchase other cryptocurrencies (such as Bitcoin or Ethereum) on exchanges such as CoinBase, send them to BNB-supporting exchanges, and purchase BNB.

Once you have BNB, transfer it to your MetaMask wallet. You are now ready to exchange these BNB for Liquidator tokens, and vice versa.


Step 4: Trade BNB for LIQUIDATOR on PancakeSwap

MetaMask is an open-source, industry-standard wallet suitable for trading Liquidator and other tokens on Decentralized Finance (DeFi) platforms. No other wallet has the same degree of independence, and MetaMask is continually audited by independent researchers.

MetaMask is a browser extension and is compatible with Chrome, FireFox, Brave, and Microsoft Edge. It operates on Desktop, Mobile, and Tablet platforms.

Be certain to back up your seed phrase in order to secure your Liquidator tokens and any other virtual assets you may store on MetaMask.

Tokenomics & Locks

Total Liquidator Token Supply:
1,000,000 [One Million]

Total Reserved Tokens:
250,000 [25%]

– for Developers: 50,000 [5%]
– for Moderators: 10,000 [1%]
– for Liquidity Providers: 100,000 [10%]
– for CEX Listing Fund: 50,000 [5%]
– for Marketing Fund: 40,000 [4%]

Available on DeFi: 750,000 [75%]

The Liquidator project uses straightforward tokenomics, without reflection, “taxes”, or other gimmicky features. These tokenomics are the product of careful consideration. To learn why, please read our mini-FAQ below:


Question 1:

“Why is the supply of Liquidator token only one million? Why didn’t you mint a quadrillion billion zillion Brazilian tokens? Even in 2022, the concept of ‘market cap’ is not widely understood, and buyers will perceive a token as ‘cheaper’ if they can trade a dollar for a number of tokens so large that expressing it requires scientific notation. Don’t you know that a high token supply encourages buying?”

Answer 1:

We are well-aware of the trend of projects minting more tokens than atoms in the observable Universe. The Liquidator team doesn’t follow trends, however. We are a fundamentally different project, and we set ourselves apart from the memecoins and moonshots in many ways – one of which is avoiding the gimmick of minting absurdly large numbers of tokens. In terms of buyers, we believe in attracting quality over quantity, and the sort of person who buys Liquidator tokens isn’t going to be fooled by high token supply. There are also three major practical reasons for keeping the number of tokens sane.

First, high token supply means that users will be dealing with enormous numbers of tokens in their wallets, and typing out long strings of zeroes is time-consuming and error-prone, especially in the heat of the moment when trading volumes are high and every second counts. Likewise, minting quintillions of tokens ensures that charts and price quotes will forever be a nightmare to read. There is a reason why petrol stations don’t list the price of gasoline in thousandths of a cent per tablespoon; there is a reason why grocery stores don’t list the price of rice in millionths of a dollar per rice grain. Serious traders know that their time is valuable, and we refuse to make them squint at charts because they’re uncertain if there are thirteen or fourteen zeroes after the decimal point on the Y-axis. Long strings of identical digits are difficult to read, and this can result in errors. There is, in fact, a biological analogy to this: even DNA replicase enzymes tend to make mistakes when the same nucleotide is repeated hundreds of times in a row.

Second, inflated token counts scare away serious traders. Not all shitcoins have high supply, and not all tokens with high supply are shitcoins, but the correlation is undeniable. Avoiding this practice is a long-term investment in the reputation and respectability of the Liquidator project.

Third, and perhaps most importantly, the price of a token influences what pair(s) it is listed against on centralized exchanges. Due to technical constraints, exchanges typically will not list tokens with very low value against major stablecoins (USDC, USDT, etc.). Instead, they will insist on listing them only against proprietary stablecoins (ex. one-cent stablecoins that are exchange-specific), and we want to avoid this for obvious reasons.


Question 2:

“Why isn’t the Liquidator token reflective? That is – why don’t you have a mechanism in place to discourage selling by ‘taxing’ transactions and sending a portion of each transaction to a burn address, or to a marketing wallet, or to a redistribution wallet, or to the liquidity pool, or to Vitalik?”

Answer 2:

The decision to avoid reflection, automatic liquidity, and other “gimmicky” tokenomics is based on the combined experience of Liquidator’s developers and (equally important) our moderator team, the latter of whose members has spent years “in the trenches” of Telegram and Discord channels for other crypto projects.

Firstly, reflective tokenomics send a clear message that the token’s only value (or, at least, a substantial part of its value) is derived from an ever-increasing flow of new buyers. In a sense, reflection is the programmatic and mathematical incarnation of a Ponzi scheme: newer purchasers “pay off” earlier purchasers, and when the influx of new buyers ends, the house of cards comes falling down. Liquidator is different: we create value for holders by profiting from liquidations on major exchanges, and we want to make that crystal clear.

Secondly, complex tokenomics ensure that a project’s Telegram channel will be perpetually full of confused users who are panicking because their transactions haven’t gone through due to insufficient slippage. This has the potential to disrupt the conversation around a token, and wastes moderation and community-management resources. Ask any moderator of any cryptocurrency project with reflection, and you’ll hear the same thing: no matter how many messages are pinned, and no matter how many times the need for slippage is emphasized, someone will still be confused. By avoiding such features, the Liquidator project ensures that trading in our token is simple, straightforward, and user-friendly.

Thirdly, reflection and similar features are a major impediment to Centralized Exchange (“CEX”) listings. Representatives of the Liquidator project have been in contact with centralized exchanges since before our token contract was even written, and we consistently hear that exchanges strongly prefer to list tokens without these features. The reason for this is simple: CEX users tend to become displeased when reflection mechanisms cause tokens to “disappear” during withdrawals, and these upset users will complain to their exchanges about this, even though tokenomics are of course outside of an exchange’s control. From the standpoint of an exchange operator, reflective tokens present a high reputational and customer-service risk. This doesn’t mean that centralized exchanges will never list assets with complex tokenomics – certain such tokens have been listed. However, exchanges demand far higher established trading volume and much larger liquidity pools (not to mention much higher listing fees) when dealing with reflectionary tokens. The simple tokenomics of Liquidator’s crypto-asset allow us to list on more exchanges, sooner, and with less cost than would otherwise be possible.

Telegram Channel

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Liquidator Whitepaper

I. ABSTRACT:

“Liquidate” is a curious verb.

In once sense, liquidation describes the forced closure of a financial position. Consider a Binance trader: he might choose to open a leveraged long position in Futures, effectively borrowing money to purchase more units of a cryptocurrency than he could otherwise afford. These tokens are in fact purchased on his behalf by Binance. If the tokens rise in price, he will reap profits far in excess of those he would earn from conventional (i.e., unleveraged) trading. However, if the tokens fall in price to the point where his financial losses are poised to exceed the value of his collateral, Binance will close his position at a loss – typically, at a total loss. We call this “liquidation” because the tokens representing his position are sold in exchange for some liquid asset, typically a fiat currency or a stablecoin representing the same.

In another sense, when the core of the Chernobyl Nuclear Power Plant detonated, the “Liquidators” (Ликвидаторы) were the men who labored in perilous conditions and gave their lives to contain the catastrophic radiation leaks consequent to the blast.

We see one obvious parallel between these uses of the word “liquidate”: in both cases, liquidation is a sort of “cleaning up”, and a way of resolving a dangerous situation. In the financial case, liquidation involves an exchange protecting itself from financial losses by eliminating the risk of “holding a customer’s bags”, i.e., the risk of absorbing the losses of a customer’s unprofitable leveraged Futures position. In the radiological case, liquidation involves a nation protecting its civilians from irradiation by eliminating the risk of further isotope leaks.

There exists a second parallel – a deeper, more meaningful parallel. The explosion at Chernobyl was, at its core (both metaphorically and literally), caused by a chain reaction. This reaction started small: a single neutron collided with an atom of Uranium-235, releasing energy and splitting the destabilized nucleus into fission products, among which were three additional neutrons. Each of these three neutrons split another atom of U-235, and one neutron became three, then nine, then twenty-seven, and so-on. The core had reached criticality, and the rest, of course, is history. Binance, like Chernobyl, is susceptible to chain reactions. Just as a nuclear meltdown can begin with a single neutron, so can a market meltdown begin with a single liquidation: as an insolvent trader is liquidated, Binance must sell off his cryptocurrency holdings before they drop in value further. However, this sell-off itself decreases the price of the cryptocurrency in question, and this price movement can force other traders with leveraged long positions into liquidation. Further liquidations cause additional selling by Binance, which causes further price drops, which in turn cause ever-more liquidations. This process can result in billions of dollars in liquidations, as occurred on April 21st, 2021 (over $5B liquidated) and on May 17th, 2021 (over $2B liquidated).

Money lost in liquidations disappears from the accounts of reckless Futures traders, but it does not disappear in an absolute sense; rather, it accrues to market-makers, holders of short positions, and to an exchange’s “insurance fund”. Money on an exchange, like mass-energy in an atomic nucleus, is conserved. One man’s short position is another man’s long position; one man’s loss is another man’s gain.

Liquidation cascades are hazardous, but just as Man may someday harness the power of atomic chain reactions to conquer the stars, so we at Liquidator.Finance harness the power of liquidation “chain reactions” to extract value from cryptocurrency exchanges and their customers. If a particular trading pair has large amounts of positive leverage (i.e., the dollar-values and leverage factors of long positions are large relative to total liquidity), it is “fissile”: Just like highly-enriched uranium, it is unstable and can be provoked into undergoing a violent chain reaction.

When Liquidator.Finance identifies such currency pairs, we use a portion of the liquidity of our token as collateral to open massive short Futures positions, causing Binance to sell tokens on our behalf, thereby increasing effective supply and dropping prices. As prices drop, traders with long positions are liquidated en masse, each liquidation triggering further price drops and ever-more liquidations, until all or nearly all long positions have been liquidated. The value of these liquidations – potentially in the millions of dollars – is transferred to our short position. We then close the shorts and use the profits both to add liquidity to the Liquidator token (increasing price stability) and to purchase our own tokens at market value (boosting prices). As the value of the Liquidator token and its liquidity pools grows, we take on ever-more-ambitious projects.

Here, we speak primarily of long-position Futures liquidations. However, short positions can also be liquidated. This is rarer, given that most Binance users are broadly bullish on cryptocurrencies (if they weren’t broadly bullish, they likely wouldn’t be on Binance); hence long positions tend to be dominant over shorts for most asset pairs at most times, and squeezing long positions is often easier and more profitable than squeezing short positions. Regardless, the fact that any leveraged position can be liquidated for fun & profit allows Liquidator.Finance to generate revenue for token-holders no matter the market conditions.

The largest cryptocurrency whales use the same strategy we employ, forcing smaller traders into liquidation, consuming their margin accounts like so many krill filtered from the twenty-thousand-league depths of the Seven Seas. The average trader stands little chance against these whales on his own. Individually, we may be minnows, but through Liquidator.Finance, it is we who become the whale.

You wake up in the morning, reach for your phone, and see the headline:

“Crypto Markets Crash In Worst Sell-Off On Record – $20 Billion In Futures Liquidated In Less Than An Hour”

Will you cry into your morning coffee? Or, will you smile, knowing that you’re on the other side of these liquidations, and that these losses are your gains?

II. SYMBOLISM:

The Liquidator.Finance project includes Atomic Age symbolism from the USSR in honor of the sacrifices made by the Chernobyl liquidators. As the Liquidators served the Soviet Union, so we serve the purchasers of our tokens.

III. THE ECONOMICS OF FUTURES MARKETS

Futures are a subset of financial options, and to understand them, we begin with a treatment of options more generally.

An options contract represents the right to buy or sell some financial asset or commodity in the future at a pre-arranged price. This price, known as the strike price, is agreed upon at the time the contract is bought. The moment an options contract is bought (by a trader) is also the moment when it is sold (by another trader, market-maker, exchange, or other counterparty). Critically, the strike price is intrinsic to the contract and will not fluctuate with market conditions, having the potential to be greater (or less) than the free-market price of the underlying asset at any given time. It is the ability to buy (or sell) units of an underlying asset at a price other than market price that gives options their potential financial value.

An enormous variety of options are available, and this variety is not exclusively due to the range of underlying assets referenced. Even for a single asset (such as Bitcoin, or platinum, or shares of AMC), a wide range of contracts exist, defined in part by the following characteristics:

1. Polarity (a right-to-buy or “long” contract versus a right-to-sell or “short” contract);

2. Strike Price (the price at which one may sell or buy);

3. Expiration (options may expire at any pre-defined time after they are purchased, or alternatively, they may be “perpetual”, i.e. non-expiring, which is equivalent to having an expiration date infinitely far in the future);

4. Exercise Rights (certain contracts may be exercised at any time after purchase, while others may be exercised only at or close to their expiration dates – the former are often called “European-style” and the latter “American-style”, though in reality both types are widely available in all markets);

5. Obligation to Exercise (conventionally, exercising an options contract is optional (hence the term “option”); in some cases, however, a purchaser of a contract is financially obligated to exercise it, and this obligation is secured by collateral in order to force exercise even if at a loss);

6. Counterparty (in some cases, an exchange is merely a market-marker and doesn’t directly sell options, rather allowing its own users to mint and secure and sell the contracts bought by others; in some cases, an exchange is the counterparty for some or all contracts).

This whitepaper is not a primer on financial instruments generally. We will not be presenting a comprehensive review of every nuance of every iteration of every options contract available in every nation and in every epoch since the 17th century Dutch Golden Age. Rather, we will focus on futures contracts offered by Binance, which are typical of futures contracts in the cryptocurrency space. Importantly, cryptocurrency futures behave differently from “normal” stock market options in several respects. RobinHood and Binance may have significant overlap in terms of user base, but the financial instruments they offer are dissimilar in critical aspects. Binance’s futures contracts – which are typical of cryptocurrency futures overall – have the following characteristics:

1. The strike price is equal to the prevailing market price (also called the “spot price”) of the asset in question at the instant a futures counteract is purchased. For example, if the price of BTC is $69,420 at the moment a future is opened, then this will be the strike price for that future – regardless of whether it is long or short. The situation becomes more complicated in that opening futures contracts (and closing them, for that matter) itself influences the market price of an asset if the value of the futures is sufficiently large relative to liquidity in the spot market. Large orders may therefore be filled at a range of prices, and the contract may be treated as having a strike price at the share-weighted average price of purchased contracts. The net result is that large long futures contracts, when opened, will tend to have strike prices slightly above the market price before the futures were opened. Large short futures contracts, in turn, will have strike prices slightly below the pre-opening market price.

2. Cryptocurrency futures are perpetual; they do not expire.

3. In order to keep futures prices close to the actual underlying price (spot price; market price) of an asset, users holding futures contracts in the “prevailing” direction (that is, in the direction corresponding to the majority of futures) are charged periodic fees, which are paid to users holding contracts in the opposite direction. For example, if the majority (by value) of Ethereum futures are long, then users holding long futures will be periodically charged a percentage of the notional value of their positions, with this money paid to users holding short positions, who will receive money proportionate to the notional value of their own shorts. Fees are charged from (or paid to) the margin balances of the traders in question. The fact that fees are based on notional value (and not on collateral value) means that, all else equal, higher leverage against a fixed collateral will result in higher fees deducted or received. For example, if a user holds short Doge positions and the majority of Doge futures are long, and this short-position holder increases his leverage by a factor of ten, the fees he receives will also be multiplied by a factor of ten.

4. In every case, the counterparties of cryptocurrency futures are exchanges (i.e., all cryptocurrency futures contracts available on Binance are sold by Binance itself, not between users).

5. Cryptocurrency futures may be “exercised” (closed) at any time.

6. Cryptocurrency futures must be closed at some point. Any trader opening a Futures contract is obligated to close that contract, and will not be permitted to withdraw his collateral until all contracts secured by that collateral have been closed.

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IV. LIQUIDATION IN FUTURES MARKETS

V. THE LIQUIDATOR STRATEGY

VI. VOTING

VII. TOKENOMICS

IIX. SOLIDITY CONTRACT

IX. CONCLUSION

III. THE NATURE OF LIQ

The Liquidator.Finance project includes Atomic Age symbolism from the USSR in honor of the sacrifices made by the Chernobyl liquidators. As the Liquidators served the Soviet Union, so we serve the purchasers of our tokens.