《Exit the Liquidity Machine: Unveiling the Internal Sniping Arbitrage of Pumpfun Token Issuance》 is an investigative report on the meme token farming model on Solana, with the main content as follows:

Sniping Arbitrage Behavior Investigation

- Objectives and Methods: Identify collaborative meme token farming behavior on Solana, focusing on the situation where deployers provide funds to sniping wallets in the same block when the token goes live. By filtering wallets that were sniped in the same block after deployment, track SOL transfers between deployers and snipers before launch, calculate the trading activities of sniping wallets on the sniped tokens, and accurately attribute profits.

- Behavioral Characteristics: The scale of same-block sniping is astonishing, with over 50% of Pumpfun tokens being sniped at the time of block creation. There are sniping behaviors financed by deployers, which are systematic, highly profitable, and usually automated, with activities concentrated during U.S. working hours, often using multi-wallet farming structures to simulate real demand, and the obfuscation methods are constantly evolving to evade detection.

Sniping Arbitrage Behavior Analysis

- Scale and Profitability: In the past month, more than 15,000 tokens were directly sniped by funded wallets in their launch block, involving over 4,600 sniping wallets and more than 10,400 deployers, accounting for about 1.75% of the Pumpfun issuance. Directly funded sniping wallets have achieved a net profit of over 15,000 SOL, with typical earnings per wallet ranging from 1 to 100 SOL, and a few exceeding 500 SOL.

- Operational Mode: Deployers often use new wallets to batch create tokens, exhibiting a “central - radial” structure. Deployers will simultaneously fund and sign snipes for multiple wallets, and after burning wallets, they will no longer sign transactions. They also split initial purchases across multiple wallets to disguise demand. Sniping wallets exit quickly, often opting for single sell-offs, with very few gradual sell-offs.

Recommendations

The report proposes a heuristic method to help protocol teams and front-ends in real-time identification, marking, and response to such activities, including tracking early holding concentration, labeling wallets associated with deployers, and issuing front-end warnings to users during high-risk issuances. @CHAIN news