Original author: PerpetualCow.hl

Original translation: AididiaoJP, Foresight News

A few days ago, I exposed the hundred billion dollar instant exchange industry, and today I want to connect the dots that no one has pieced together on crypto Twitter.

Since 2018, while almost all other cryptocurrencies have been surging, the price of Monero (XMR) has been stuck in a certain range.

Most people attribute this to delistings from exchanges, regulatory pressure, or the narrative that "privacy coins are dead."

They are all wrong.

To understand what is happening, you must first delve into the history of Monero XMR, including all the delisting events and how most people actually purchase this coin.

The Real Demand for Monero XMR

People have always wanted Monero, not just for privacy, but because it is seen as an alternative store of value to Bitcoin, like a Swiss bank account in the 21st century.

Its utility has not changed because exchanges are afraid of regulation and have delisted it.

This can be compared to illegal drug transactions: when you can't buy from a legitimate pharmacy, addicts will seek more dubious channels, even if it costs more to get what they need.

As a result, the demand for Monero has flowed into instant exchange services rather than centralized exchanges.

Think from the perspective of an average user in 2024:

You want to buy Monero, but Binance just delisted it, and Coinbase won't touch it at all. Other smaller exchanges that still trade Monero are likely to freeze your funds due to involvement with this coin.

Your choices are limited to two:

• Find a third-rate exchange that still lists Monero and pray they won't run off with your money.
• Use an instant exchange service, pay high fees, and pray they won't freeze your funds indefinitely under the pretext of "anti-money laundering review."

Over 60% of users chose the second option.

These services have become the de facto entry and exit channels for the Monero ecosystem.

They are certainly not legitimate, the exchange rates are poor, but users have no other choice.

After all legitimate exchanges abandoned Monero, the instant exchange industry became the only channel, absorbing all the trading volume of Monero.

Tracking the Flow of Funds

All instant exchange services operate in the same way:

Users send Bitcoin, receive Monero, and the service provider secretly charges a fee of 3-4% (officially only 0.5-1%).

But these fees are priced in Monero.

So how do these service providers handle the Monero they receive?

They do not hold it long-term; they are not believers. These are offshore companies seeking fiat profits, who will immediately convert Monero into stablecoins and cash out.

Thus, millions of dollars worth of Monero are sold into the market every day.

In terms of market microstructure, this creates a continuous one-way outflow of funds. Regardless of the overall market conditions, these service providers are continuously selling. While this is just their business model, the impact on price is destructive.

Quantifying the Outflow of Funds

In my previous article, I estimated that the instant exchange industry handles about $150 billion in transactions annually (across all chains), and this is just the on-chain verifiable portion.

The trading volume of Monero is invisible due to its privacy features, but the industry estimates it accounts for about 20% of the total flow of instant exchanges.

Assuming $30 billion worth of Monero is exchanged through these services each year.

Conservatively, the actual number could be half of that, around $15 billion.

At an average fee of 0.75% (most actually charge 1%), the annual fees collected in Monero would be worth about $112.5 million.

All of this Monero will be sold into the market.

This means there is over $300,000 of passive selling pressure every day. It's like an invisible water pump continuously draining the value of Monero.

This is just a conservative estimate. If Monero truly accounts for 20% of the trading volume and charges 1%, then it would be $300 million annually, close to $1 million of selling pressure daily.

But that's not all; there's also the "anti-money laundering trap."

The Anti-Money Laundering Trap

This is the "dirty secret" I revealed in my last article: these services, while promoting "no KYC," will arbitrarily freeze user funds under the guise of "anti-money laundering review."

It is estimated that 2-5% of transactions through instant exchange services will be frozen. The proportion of large transactions that are frozen is even higher.

This creates a vicious cycle:

• Small transactions can go through but are charged fees 10-20 times higher than normal.
• Large transactions are completely frozen, usually permanently.
• The actual buy orders that can reach the market are just a small fraction of the real demand.

This creates the most brutal price discovery barrier: those who can truly influence the price are systematically excluded from the market.

The real demand for Monero has always been far higher than the level reflected by its price. The instant exchange industry either extracts this demand or directly blocks it.

A Captive Market

Let me clarify this vicious cycle:

The instant exchange industry did not win the market through competitiveness. When all exchanges delisted Monero, they gained a monopoly position and then maximally exploited users who had nowhere else to go.

1% fees combined with extremely poor exchange rates and random fund freezes.

Users endure this because they have no other choice, and these service providers know this well.

This is what happens when an entire asset class is forced into a single channel controlled by anonymous offshore operators: they exploit with uncompetitive products.

Every penny they extract becomes selling pressure on Monero.

Wagyu's Solution

Two days ago, Wagyu v2 launched.

The core idea is simple: allow Monero users to enjoy the same pricing level as exchange traders.

When you exchange through Wagyu, your order is routed to @Hyperliquidx—where the most competitive market makers in the crypto space compete for orders.

These market makers also provide liquidity for Binance, Bybit, and OKX, quoting very tight spreads.

The result is: you can trade at exchange-level prices and fees, no longer 1% or 0.5%, but at extremely low rates like professional traders.

This is the first time since Monero was delisted from exchanges that users do not have to be "slaughtered" for using their own assets.

Just a single $100,000 transaction can prevent over $1,000 of selling pressure from hitting the market.

In the 48 hours since Wagyu v2 launched, it has already processed millions of dollars in exchanges and provided the best market prices:

Those transactions that would have gone through traditional services, incurring fees over 1% and causing the market to face sudden selling pressure of tens of thousands of dollars, are now being conducted through Wagyu.

• $1 million exchange through traditional services = $10,000 worth of Monero sold.
• $1 million exchange through Wagyu = zero forced selling.

Multiply this effect by every large Monero buyer who no longer has to be "robbed."

Reversing the Vicious Cycle

For years, Monero has been stuck in a negative cycle:

The instant exchange industry acts as a layer of value extraction, standing between buyers and the true price. They intercept demand, extract profits, and distort price signals. Users cannot bypass them because there are no other options.

Now, all of this has changed.

In just two days since launch, trading volume has begun to migrate to Wagyu. People are realizing that they can get exchange-level pricing for this asset that even Binance does not list, and the news is spreading rapidly.

The cycle is reversing:

Monero breaking through $600 and starting its first price discovery in years is no coincidence.

Wagyu is saving Monero

On this point, I do not intend to be modest:

Every exchange conducted through Wagyu rather than traditional services is a true buy order reaching the market.

Every million-dollar transaction flowing through us means over $10,000 will not be sold to other holders.

We are not extracting from the Monero ecosystem; we are directly connecting it to real liquidity.

The parasitic layer that has suppressed Monero for years has finally met its competitor. And we are not competing under their rules—we are making their entire model obsolete.

When users can obtain exchange-level pricing with zero freeze risk through Wagyu, who will still pay 1% fees to those anonymous offshore service providers that might freeze their funds?

No one will.

What This Means

I am not here to give price predictions. I do not know if Monero will rise to $1,000, $2,000, or fall back to $400.

But I do know this: for the first time since being delisted from exchanges, the demand for Monero can truly translate into price.

In just two days since launch, we have already processed millions of dollars in transactions—transactions that would have continued to "bleed" the market.

With the "ceiling" removed, Monero at $600 is still undervalued. At least now, the market will truly determine its value.

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

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