MMT short squeeze event review: a meticulously designed money-making game

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Author: zhou, ChainCatcher

The MMT short squeeze event has passed four days, and the market's aftershocks have yet to subside. KOLs who once loudly promoted the potential of MMT have also failed to escape the fate of being taught a lesson by the market. As of today, the full picture of the event is gradually becoming clear, from hype and attracting new investors, pre-market warnings of price breaks, to a frenzied short squeeze and a sharp drop that hit long positions. This crash not only burst the speculative bubble but also exposed deep-seated issues of manipulation and a crisis of trust within the industry.

Image source: X user @cloakmk

It is reported that Momentum, as a leading centralized liquidity market maker (CLMM) DEX on the Sui network, has attracted widespread attention with its Uniswap v3-based architecture and highly efficient trading mechanisms. According to information from Rootdata, Momentum has received investments from institutions such as OKX Ventures, Jump Crypto, Varys Capital, Coinbase Ventures, Amber Group, and Sui, and participated in a $5 million strategic financing for DeAgentAI (AIA) in August this year.

Since the beta version launched in March 2025, Momentum has accumulated over 2 million independent trading users, with a cumulative trading volume exceeding 18 billion dollars, and a total locked value (TVL) of over 500 million dollars. These impressive achievements had led the market to have high expectations for it, but they also laid the groundwork for subsequent turmoil.

In October 2025, Momentum Finance will launch the MMT token community subscription through the Buidlpad platform, with a total fundraising target set at $4.5 million. The first-level valuation is set at $250 million, benefiting users who qualify for staking through the Buidlpad HODL or Wagmi activities; the second-level valuation will be $350 million, aimed at other qualified participants. Subscription amounts range from $50 to $2,000, with some users who meet the staking or activity criteria able to reach up to $20,000.

In addition, users who stake more than $3,000 in the Buidlpad HODL event before October 25 will enjoy first-tier pricing and an increased investment cap of $3,000 to $20,000; long-term community members participating in Wagmi 1 and Wagmi 2 can receive first-tier valuation without staking; content creators submitting original content to the Momentum ecosystem can also receive priority quotas of over $150. This low-threshold, high-incentive subscription design has quickly ignited the enthusiasm of retail investors and KOLs.

On November 4, the day of the TGE, the MMT price opened low at $0.3 in pre-market trading on the Bybit platform, below the ICO cost of most retail investors at $0.35. This trend clearly shows signs of breaking below the issue price, prompting many investors to choose to open short positions to lock in profits. After the official opening, the spot and contract prices of MMT once surged to $0.8. This brief rise aligns with the usual pattern seen with new coins being listed, where there is typically a spike followed by a pullback. Therefore, shorting after the surge is considered a reasonable action, attracting more people to join the short camp.

However, the situation began to change on the second day. The MMT price surged several times between 0:00 and 5:00 on November 5, quickly rising from a low to $6.47 (Binance contract), and even reaching $10.5 on Bybit. This sharp rise precisely triggered the liquidation of short positions, with the scale of liquidations exceeding $100 million in a short period.

Shortly after, the price of MMT fell sharply from its peak to below $1, with a retracement of over 80%. According to Suiscan data, the Momentum team's associated address 0xe7cd…7a88a4 transferred 38 million MMT tokens to Binance, worth approximately $45.6 million. This batch of tokens came from the second-largest holding address 0x1b4d2…7355c8, which holds 18.57% of the total MMT supply, and this sell-off triggered panic in the market.

The tactics of this operation seem familiar, and the community speculates that there may be a conspiracy between an exchange insider and market makers behind this event. Well-known crypto KOL Crypto Fearless analyzes that this time's MMT short squeeze, in addition to the project team cooperating with market makers to delay airdrop distribution and sharply pump the price at midnight, has more hidden insider information: internal exchange personnel shared the short positions of big short sellers with market makers, allowing them to precisely trigger the short squeeze. This is eerily similar to the case exposed by Spartan Group in 2023, further shaking industry trust.

For KOLs and retail investors participating in new project launches, they originally obtained airdrop tokens and priority quotas through promotion, but due to high leverage operations and severe market fluctuations, they faced liquidation. A typical example is trader @Elizabethofyou, who had a hedging amount of $7,000 and ultimately lost $130,000, with a liquidation price of $6.85. She stated that her hedge was liquidated on Bybit, and Bybit has responded that they are following up on the matter.

Looking back on this event, the active promotion by KOLs had laid a deep foundation for the short squeeze of MMT. They created extremely high market expectations through social media and content creation, attracting a large number of retail investors to participate. Moreover, the previous profit-making effect of several projects on the Buidlpad platform further boosted investors' confidence. It is worth mentioning that Buidlpad had announced a price protection mechanism, promising that if MMT was below the community issuance price within 30 days after TGE, users who did not withdraw tokens could apply for a full refund.

In theory, if there is no short selling, new investors could avoid losses. However, the Bybit price opened low before the market, directly triggering the expectation of a price drop, prompting investors to emotionally open short positions for hedging. The project team then successfully converted investors' funds into their own profits through delayed unlocks and drastic price increases in the early morning; the sale of 38 million tokens further exposed the project team's intention for short-term profits.

The current price of MMT is hovering around $0.6, down about 85% from its peak, and its future trend still depends on the movement of the remaining tokens held by the team. It is worth noting that since 12 PM yesterday, the DeAgentAI token AIA, invested by Momentum, suddenly surged, achieving an astonishing tenfold increase within a day. Previously, AIA had accurately triggered the liquidation of hedging investors with a similar manipulation tactic, raising concerns about the signs of history repeating itself.

For investors, this turmoil undoubtedly serves as another wake-up call: even when hedging against losses or being bearish on a project, it is essential to manage the potential risks in contract trading. In an abnormal trading environment, it is even more important to utilize tools such as stop-loss orders and adjust margin requirements; otherwise, one will inevitably suffer painful lessons from the market. In a regulatory environment that is still not fully developed, similar incidents may become the norm.

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