FLOKI <> CAT Airdrop Arb
Time sensitive so quick write-up on a delta-neutral play. Although you could also play this as a straight FLOKI long if you believe memecoins could perform well in the near-term.
TLDR: Long spot FLOKI on Binance and short corresponding perp for $CAT airdrop. Can unwind this trade after 29 Aug 2024.
Situation overview
Simon’s Cat is a TokenFi launchpad project based on the apparently popular Youtube channel. I’ve never heard of it but it has 6.3M Youtube subscribers and 5.4M Instagram followers.
The TokenFi launchpad was fully subscribed, raising $4.3M USDT at $25M market cap.
FLOKI will airdrop $CAT tokens to on-chain and Binance holders.
900B $CAT tokens will be airdropped to Binance holders, as long as they meet the 400K FLOKI token threshold. Approximately 2.2T of FLOKI supply on Binance based on known BSC + ETH wallets.
Naturally, not all Binance holders will be eligible for airdrop, given the legacy name of FLOKI (ie probably lots of dead/forgotten holders).
Snapshot for token holders will be taken on 29 Aug 2024 at 23:59:59 UTC.
Thesis
Playing the delta-neutral airdrop is attractive, given that $CAT is a BSC-native token, and supported by both Floki and TokenFi. Floki has both Binance spot + perps listing; TokenFi has Binance perps listing.
Difficult to parse Binance perps listing, but recent listings tend to favor higher-float, lower-cap tokens e.g. memecoins.
Therefore I think there is good upside optionality on $CAT token and decent chance of Binance listing.
Modeling payoff
Below I present some rough estimates of the ROI and APR for a delta-neutral play. I assume the actual airdrop will be liquid on Sep 13, 2024, 2 weeks after the snapshot.
Note: above ROI and APR sensitivity does not capital cost on margin for hedging (will let you decide how to discount the figures depending on your margin requirement)
Resources:
- ◆$CAT launchpad: https://blog.floki.com/simons-cat-to-launch-on-tokenfi-launchpad-ba337432517c
- ◆Floki airdrop to Binance: https://blog.floki.com/binance-will-support-the-simons-cat-cat-airdrop-to-floki-holders-68b3c6976056
- ◆CAT CoinGecko: https://www.coingecko.com/en/coins/simons-cat
Risks
- ◆Funding risk
- ◆Mitigated by the short period to snapshot
- ◆Historically does not have prolonged negative funding, even amidst weak crypto price performance environment
- ◆Dilution risk
- ◆More supply could migrate to Binance, diluting the above APRs
- ◆Likely relatively limited given the short snapshot window
- ◆Airdrop liquid timing
- ◆While the snapshot of FLOKI holders is known, the timing of CAT’s actual airdrop is unknown. APR may be diluted if actual airdrop is delayed
Affiliate Disclosures
- •The author and/or others the author advises do not currently hold, or plan to initiate, an investment position in target.
- •The author does not hold an affiliated position with the target such as employment, directorship, or consultancy.
- •The author is not being compensated in any form by target in relation to this research.
- •To the best of the author's knowledge, the information provided here contains no material, non-public information. The accuracy of the information is the responsibility of the reader.