I Found XMR's Hidden Sell Pressure. Then I Killed It.

A few days ago I exposed the billion dollar instant swap industry. Today I’m connecting dots that nobody on CT has pieced together yet.

XMR had been trapped in a range since 2018 while almost everything else pumped.

Most people attributed this to delistings, regulatory pressure, or just “privacy coins are dead” narratives.

They were all wrong.

To understand what’s been happening, you have to first dig into Monero’s past with all its exchange delistings and how most people actually buy the coin.

The Demand for XMR

People always wanted XMR, not just for privacy reasons but because it was seen as a store of value instead of BTC, like the 21st century equivalent of a Swiss bank account.

The use case didn’t change just because exchanges got scared of regulators and got pressured to delist it.

You can compare it to the illegal drug industry, people will find sketchier ways to acquire their drug of habit, paying worse prices if they need to as opposed to if it was available in a pharmacy.

The demand got funneled into instant swap services instead of CEXs.

Think about it from a normal user’s perspective in 2024.

You want to buy XMR, Binance just delisted it. Coinbase won’t touch it and any of the existing smaller CEXs that still have it will likely freeze your funds for touching with a coin.

Your options are:

1. Find some sketchy tier-3 CEX that still lists it and pray they don’t rug your deposit/withdrawal
2. Use an instant swap service paying massive fees and also pray they don’t freeze your swap for legalized theft disguised under an endless bureaucratic process of “AML checks”

For over 60% of users, option 2 was the most viable path.

These services became the de facto on-ramp and off-ramp for the entire Monero ecosystem.

They certainly weren’t legit and they had terrible rates, but there was nowhere else to go.

The instant swap industry inherited XMR’s volume by being the only game in town after every real exchange abandoned ship.

Following The Money

Every instant swap service operates on the same basic model:

User sends BTC, receives XMR, service takes an invisible 3-4% fee (visibly 0.5-1%).

But that fee on XMR purchases is denominated in XMR.

So what do these services do with their fee revenue?

They’re not holding.. they’re definitely not believers. These are offshore businesses optimizing for fiat profit. The XMR gets converted to stables and cashed out.

Every single day millions of dollars worth of XMR get sold on the market this way.

In traditional market microstructure terms, this creates persistent unidirectional flow. The services act as a constant liquidity taker on the sell side, regardless of broader market conditions. It’s just their business model but it’s malicious on the effect of price.

Quantifying The Bleed

In my previous article I estimated the instant swap industry processes around $150 billion annually across all chains, that’s only what I could verify on-chain.

XMR volume is invisible by design, but industry estimates put Monero at roughly 20% of total instant swap flow.

Let’s say $30 billion in annual XMR volume flowing through these services.

Being conservative, we can say the real number is half that. $15 billion annually.

At 0.75% average fee (being generous - most charge a full 1%), that’s:

$112.5 million in XMR fees collected per year.

All of it getting market sold.

That’s over $300,000 in passive sell pressure every single day. Just a constant, invisible drain on XMR’s price.

And that’s the conservative estimate.. If XMR really is 20% of volume at a full 1% fee, you’re looking at $300 million annually. Nearly a million dollars a day in sell pressure from fees alone.

But there is also the AML trap.

The AML trap

The “dirty secret” I exposed in the last article. These services advertise NO KYC but will freeze your funds for “AML review” at their discretion.

Around 2-5% of volume flowing through instant swap services are estimated to be frozen. Larger transactions also get flagged disproportionately.

So you have a situation where:

1. Small buys go through but get fee-extracted at 10-20x normal rates
2. Large buys get frozen entirely, often permanently
3. The net buy pressure that actually reaches the market is a fraction of real demand

This is selection bias working against price discovery in the most brutal way possible. The marginal buyer (the one whose order actually impacts price) is systematically being removed from the order flow.

The real demand for XMR has been substantially higher than what the price reflected. The instant swap industry was absorbing that demand and either extracting fees from it or blocking it entirely.

A Captive Market Getting Milked

Let me be clear about the dynamic here.

The instant swap industry didn’t build a competitive product that won on merit. They were handed a monopoly when every CEX delisted XMR. Then they extracted maximum value from a captive user base that had nowhere else to turn.

1% fees with a terrible spread on top and random freezes.

Users tolerated it because the alternative was not participating in XMR at all. The services knew this and acted accordingly.

This is what happens when an entire asset class gets pushed into a single chokepoint controlled by anonymous offshore operators. They just extract with a terrible uncompetitive product.

And every dollar they extracted was a dollar of sell pressure on XMR.

Enter Wagyu

Two days ago Wagyu v2 went live.

The premise was simple: what if XMR users could access the same pricing as CEX traders?

When you swap through Wagyu, your order gets routed through @ Hyperliquidx where the most competitive market makers in crypto are fighting for order flow.

These are the same MMs providing liquidity on Binance, Bybit and OKX with extremely tight spreads.

The result is that you get CEX-tier execution at CEX-tier fees. Not 1% or 0.5% but minimal basis points like real traders get.

For the first time since the delistings, XMR users aren’t getting fleeced just to access their own asset.

On a single $100k order, we’re talking about preventing $1,000+ in sell pressure that would have otherwise hit the market.

Wagyu v2 has been live for 48 hours and is already processing multi-million dollar swaps with the best prices available:

Transactions that would have otherwise gone through legacy services, eaten 1%+ fees, and resulted in instant $10k+ market dumps on XMR are now being routed through Wagyu.

One $1m swap through a legacy service = $10,000 in XMR sold.

That same $1m swap through Wagyu = $0 in forced selling.

Multiply this across every large XMR buyer who’s discovered they don’t have to get robbed anymore.

The Reflexivity Problem (Now Working In Reverse)

For years XMR was caught in a negative reflexivity loop.

The instant swap industry was a value extraction layer sitting between XMR buyers and actual price discovery. They captured the demand, skimmed it, and dampened the price signal. Users couldn’t route around them because there was no other route.

That just changed.

Two days in, volume is already migrating to Wagyu. People are realizing they can get Binance-tier pricing on an asset that Binance won’t even list and the word is spreading.

The loop is reversing:

XMR broke $600 and is entering price discovery for the first time in years, this is not a coincidence.

Wagyu Is Saving XMR

I’m not going to be modest about this.

Every swap that routes through Wagyu instead of a legacy service is buy pressure that actually reaches the market.

Every million dollars that flows through us is $10,000+ that doesn’t get dumped on holders.

We’re not extracting from the XMR ecosystem but instead are plugging it directly into real liquidity.

The parasitic layer that suppressed XMR for years finally has competition. And we’re not competing on their terms, we’re making their entire model obsolete.

Why would anyone pay 1% to an anonymous offshore service that might freeze their funds when they can get CEX pricing through Wagyu with zero freeze risk?

They wouldn’t.

What This Means

I’m not here to give you a price target. I don’t know if XMR goes to $1,000 or $2,000 or back to $400.

What I know is this: for the first time since the CEX delistings, XMR demand can actually translate to price.

We’ve been live for two days and we’re already routing millions in volume that would have otherwise bled the market.

XMR at $600 is still considered cheap now that the ceiling has been lifted. At least now we’re going to find out what the market actually thinks it’s worth.

Price discovery is finally possible and Wagyu is making it happen.

moo. 🐮

P.S. - To the legacy swap services still charging 1%: your monopoly is over. Adapt or die.

I’m PerpetualCow and I approve this message.

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