Solana memecoin protocol teases new ‘short compression’ platform

The Solana protocol, originally designed to short memecoins, is launching a new app that does the opposite, allowing users to go long with highly shorted tokens.

In an August 20 X post, the Dumpy.fun protocol — which borrows its name from the highly profitable Solana memecoin distributor pump.fun — said it will launch a short-term compression tool called “squeezy.lol” next week on August 27. .

Short Forum said the new tool would usher in a “new era of PVP” – referring to the aggressive, player-versus-player trading style that memecoins as an asset class encourages.

The Squeezy.lol platform allows memecoin traders to “take over” dumpy.fun users with a new tool called the “squeeze browser” that displays the shortest memecoins.

He said the platform's new tool will allow investors to view the most shorted assets and allow traders to trigger a “short squeeze” of the memecoin community.

Dumpy.fun allows its users to short Solana memecoins in small amounts, which has presented a profitable opportunity for many traders as the price of Solana-based memecoins has dropped significantly over the past few weeks.

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“Shorting” an asset like a cryptocurrency is when traders bet that the asset's price will fall. A short squeeze occurs when the price of an asset that is too short rises rapidly, forcing short sellers to buy more of the asset to cover their cost basis.

The GameStop saga of 2021 stands as one of the most famous examples of short-squeezing, with thousands of retailers forcing hedge funds to liquidate their short positions as the company's stock rose more than 1,500% in one month.

Dumpy.fun currently supports a total of 11 memecoins, including Dogwifhat (WIF), Wen (WEN), and Bonk (BONK), but says it will introduce permissionless listings, allowing users to short whatever newly created tokens they want.

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