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FollowingHunter Biden said the collapse of the LAPTOP token was caused by insufficient liquidity and market maker behavior.
Hunter Biden said that a forensic review of the issuance process of the "LAPTOP" token found that the reason for the rapid collapse of the token after an extreme surge in price was unusually thin liquidity and subsequent market maker activity. At the same time, online records show that the project founding team did not sell its allocated token shares.
This conclusion challenges the previously widely believed view of "rug pull" in the market. However, the identities of the market makers involved in the report have not been disclosed and are only marked as "Market Maker 1" and "Market Maker 2", and this survey was commissioned by the project team.
Weak liquidity exposes issue risk
Groom Lake conducted a one-by-one review of all recorded transactions during the issue and found that a market maker backed by US$500,000 initially invested only approximately US$5,200 in the initial liquidity pool. There were less than 30,000 LAPTOP tokens available for trading in the pool at the time, resulting in an extreme lack of depth in the market: a purchase of just $6 could drive the price up by 5%, while selling the same amount required about $7,400.
Groom Lake compared 668 other similar token issuance cases and did not find any such a serious imbalance. Subsequently, the price of the LAPTOP token soared from $0.05 to about $317 in less than two minutes, but at the end of the first hour, the price was down 98% from its peak.
The report noted that 84 seconds after reaching the peak, liquidity positions associated with Market Maker 1 were withdrawn, causing the cash available to sellers based on the quoted price to plummet from approximately US$16,157 to zero.
The report also found earnings related to two market makers. Liquidity positions associated with Market Maker 1 ultimately earned approximately $686,000; while activities associated with Market Maker 2 recorded net USDC revenue of more than $2.1 million under the accounting standards specified in the report.
Biden acknowledged his responsibility for hiring the companies and called on market-makers he believed were mishandling to buy back the tokens and destroy them.
The founder's wallet balance remains unchanged
There is a view supported by stronger on-chain data. Groom Lake found that the founder's wallet, which holds 300 million LAPTOP tokens (30% of the original total supply), had no record of any token transfers as of October 2. Biden also said his token allocation has been locked for six months and will then be phased out over two years.
Currently, the token is trading at approximately US$0.08, up about 10% within the day, and its market value is approximately US$29 million, much lower than the US$560 million on the day of issuance. Daily trading volume surged 143% from the previous day to $4.6 million, according to CoinGecko data, indicating an increase in market activity with the release of the Biden report.
Market reactions to this new financial analysis remain polarized. Trader Crypto Bitlord believes Biden may have been misled by an inexperienced market maker, while lawyer Hailey Lennon refuted this explanation as an "hindsight" excuse for what still seemed to be a "retreat from the pool."
However, cryptocurrency consultant Nicki Sanders takes a more cautious view. He pointed out that although the statement that the founder's wallet was not moved can be verified through online data, the report was commissioned by Biden's team and the relevant market makers have not yet publicly responded.
