ZachXBT Faces Trust Crisis? $3.9 Million Meme Coin Controversy Analysis

Original Author: Damilare Damidez, Crypto Analyst

Original Translator: Felix, PANews

Recently, there have been some conflicting opinions in the crypto community regarding the reputation of on-chain detective ZachXBT. Some still see ZachXBT as a martyr, while others believe that the "dragon slayer" ZachXBT has ultimately become the "dragon." In response to this, crypto analyst Damilare Damidez posted in support of ZachXBT and revealed the truth behind the controversy.

Background

A few days ago, U.S. President Trump launched his meme coin $TRUMP, and soon after, his wife also launched a token. These events caused a stir in the market. Amidst this meme frenzy, cryptocurrency trader Micki tweeted, "The busiest person in the crypto space for the next four years will be ZachXBT."

ZachXBT is a renowned blockchain investigator known for collaborating with institutions to track fraudulent activities on the blockchain. In response to Micki's comment, ZachXBT jokingly complained that he had not received any reward from it.

ZachXBT stated, "One of the biggest regrets is not putting making money first." "I wasted time on this (helping recover funds), which did not bring me any reward, but only distorted my view of doing good deeds."

"Moreover, a few months ago, the U.S. government was hacked, losing $20 million, and I personally helped recover a significant portion of the funds. However, in the end, I did not receive any reward personally."

Following these remarks, a token called "Justice for ZachXBT" was issued, with the token name being ZACHXBT, created by a degen trader. ZachXBT was airdropped 50% of the token supply (500,000 ZACHXBT).

Regarding this, ZachXBT's actions were as follows:

Increased Liquidity by 50%:

ZachXBT added his airdropped tokens to a unilateral liquidity pool on Raydium. The token's market value surged from $5 million to $80 million within two hours.

One hour later, ZachXBT withdrew liquidity:

· Initially withdrew 1.7 million ZACHXBT and 340 SOL

· Subsequently withdrew 89 million ZACHXBT and 15,771 SOL

· Total withdrawal: 91 million ZACHXBT and 16,111 SOL

The following diagram illustrates the operation of a single-sided pool and liquidity withdrawal:

When you provide single-sided liquidity for a token on Raydium, the platform uses the token you deposited to automatically purchase an equivalent amount of the paired token, such as SOL, creating a balanced LP token.

When removing liquidity, the fees you earn are automatically added to your share in the pool. This means:

· When you withdraw liquidity, you receive your tokens (e.g., your token and SOL) as well as the fees you earned in additional token form

· These fees are paid in both tokens of the pair (like your token and SOL) based on the pool's trading activity

Additionally, with donations, a total of 16,348 SOL (worth $3.87 million).

ZachXBT transferred the earned value of $3.8 million and 16,348 SOL to another wallet.

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Subsequently, ZachXBT locked the liquidity pool and added 96 million ZACHXBT to it.

Additional Token Sale: ZachXBT also received 50% supply of another token, CRIME, for sale at a price of $57,000 (still in the wallet).

Why Was the Token Sold Off?

The token's collapse was not due to ZachXBT's actions, but rather because of FUD and traders' lack of on-chain knowledge. Once the news of the liquidity withdrawal spread, many people panicked and sold off their token holdings.

Analysis

ZachXBT's actions show a sense of responsibility:

· He did not rug the project but instead increased liquidity, allowing others to trade

· The 10% withdrawal helped him financially, but many see it as well-deserved

· Re-addition of liquidity was done without any apparent hesitation

The controversy mainly arises from misunderstanding rather than malice.

Conclusion

ZachXBT's handling of the $ZACHXBT token exemplifies a fair approach. The token was meant to acknowledge his contributions, and he earned profits without leveraging his influence.

ZachXBT remains a martyr rather than a villain. The market simply needs more education on on-chain mechanics and liquidity dynamics.

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