Cryptocurrency traders paired memin with stocks to trade on Robinhood-and (to some extent) it worked

memecoin BONER briefly manipulated the tokenized stock price of Hims & Hers Health on the Robinhood chain

On the weekend of August 30, the memecoin named BONER locked in more than half of the tokenized shares of Hims & Hers Health (ticker: HIMS) on the Robinhood blockchain. The operation briefly pushed the packaged version of the stock to $132.64, more than four times the actual closing price of $28.84 on Friday. Although the actual share price of HIMS fluctuates very little, this did not prevent meme traders from trying similar operations again.

Mechanism analysis: How liquidity pools affect pricing

Robinhood Chain was officially launched in July. It is a permission-free Layer-2 network that allows developers to build a variety of applications, including memecoin that directly targets tokenized stocks rather than stablecoins. Tokenized stocks are digital tokens designed to be pegged one-to-one to the actual stock price. When memecoin is purchased, the stock tokens used for payment are locked in its liquidity pool-that is, in the crypto reserve that sets the transaction price.

After a ten-day buying operation, 31,198 of the 58,714 tokenized HIMS shares existing on the market were individually locked into the BONER liquidity pool. Since Robinhood only allows one licensed partner to mince or destroy these tokens, the total supply remains fixed, with approximately one tokenized share for every 4,000 actual shares. With the New York Stock Exchange closed for weekends and no real-time price reference, only thousands of dollars in trading volume would be enough to drive large price swings.

The gap between short squeeze intentions and mathematical reality

The goal is to trigger a "short squeeze", in which traders betting on stocks falling are forced to buy back stocks at rising prices, pushing prices higher further. HIMS has been a hot short target, with about a quarter of its actual stake on the New York Stock Exchange being shorted.

However, BONER's official website also admitted that this operation would not work mathematically: the total of all tokenized HIMS shares accounted for only 0.1% of the short position. BONER is not the only project adopting this strategy on the chain; in fact, on the network, meme coins are traded more than tokenized stocks. For example, Artificial Inu is linked to tokenized Nvidia shares, Saylormoon is linked to tokenized Strategy shares, and Clippy XP is linked to Microsoft shares. Of course, for investors with high risk appetite, there are many other low-liquidity meme coins to choose from.

Comparison with the 2021 GameStop event

This operating mode is reminiscent of the 2021 GameStop event. At the time, the WallStreetBets forum on Reddit gathered large amounts of money to conduct a real short squeeze, forcing hedge funds to liquidate their positions at huge losses and driving up real stock prices on real stock exchanges. In contrast, BONER's operations only affected IOUs (I owe you certificates) with thin trading volume, and the price will reset once the market reopens and new coins are minted.

While these meme coin pairings may not be able to squeeze target stocks as substantial as GameStop traders did back then, these tokens do bring huge attention and liquidity to the newly launched Robinhood Chain network.

Overview of key project data

Currently, this meme stock pairing boom is dominated by Artificial Inu (trading code: AI), which has a market value of US$203 million and a 24-hour trading volume of US$16.3 million. Its main AI/NVDA liquidity pool holds approximately US$5.2 million in liquidity. Saylormoon borrows Strategy's ticker symbol MSTR, with a market cap of $1.75 million, an average daily trading volume of $2 million, and approximately $450,000 in its main MSTR pool. Clippy XP is linked to tokenized Microsoft, with a market cap of $1.69 million, transaction volume of $641,000, and approximately $395,000 in liquidity in the main MSFT pool.

The latest member, MEME, is paired with tokenized AMC shares and currently has a market value of US$56 million and a 24-hour trading volume of US$73.5 million, ranking first in the group, with US$2.6 million in liquidity in its main pool. However, these pools currently account for only a negligible fraction of the supply of underlying tokenized shares.

Regulatory disputes and responses from all parties

Robinhood CEO Vlad Tenev welcomed the trend, saying the company's chain was "also very suitable for meme coins," although its original intention was to put real-world assets on the chain. Tnev has also faced criticism, including Adam Aron, CEO of AMC Entertainment. Allen condemned Tnev and Robinhood on Platform X yesterday, calling the practice of trading AMC tokenized shares in apps "contemptuous, appalling, disgusting, unforgivable, and despicable." He emphasized that AMC had no connection with the practice and questioned the legitimacy of the plan.

Robinhood acted calmly in the face of criticism. Tnev asked casually: "What's there to worry about?"