Author: Hyphin, On Chain Times
Translation: Golden Finance Xiaozou
1. Introduction
Since our last meme coin article (in March of this year), the total market size and market share of the industry have continued to grow steadily, showing no obvious signs of stagnation. Undoubtedly, it is the fastest horse on the track.
This phenomenon can be attributed to the viral nature of social media (its inherent characteristics), extremely low barriers to entry, and the constantly emerging fresh narratives that attract speculators, even though many (if not most) fail to maintain meaningful attention in the long term. Nevertheless, market participants have become accustomed to this, frequently entering and exiting profitable short-term trends, leveraging momentum to gain profits while maintaining loyalty to high-belief bets, making them more durable. Although some may be reluctant to admit it, in the current market environment, the likelihood of long-established memes that have passed thorough market testing facing extinction is lower than those assets that rely solely on impressions and provide no substantial value (limited to the transfer of funds).
Although Solana may not be the only contributor to the total market cap of these massive tokens, most of the activity in the field indeed occurs within its on-chain ecosystem trenches. For this reason, this article will continue to focus on this chain, attempting to provide a global picture.
2. Tribute to Pump
With the birth of pump.fun (a Solana-native token incubation platform), local market dynamics underwent a significant shift. Interacting with speculative tokens became simpler, cheaper, and safer (from a security perspective). Through a user-friendly interface, standardized token deployment in a controlled environment allows anyone to create new tokens based on universal configurations, thereby eliminating the risk of abuse from potential malicious actors hidden within smart contracts. This essentially requires the deployer to provide some creative input without any technical knowledge. By abstracting away all complexities, attention is focused on what truly matters—mass speculation.
Once a tokenized meme is created, it can be traded directly in the platform's internal market, and once its market cap reaches approximately $69,000, it will be automatically deployed to Raydium. However, most creations fail to reach this threshold and are never launched into the market.
About one in every hundred tokens 'graduates' from pump.fun, due to the immense saturation, limited liquidity, and other reasons beyond the scope of this article. Those who step into the arena must present something interesting and shockingly unique to catch the attention of the warriors in the trenches. Despite these challenges, the protocol quickly established itself as a legitimate gateway for trading micro-cap tokens and launching new tokens, rapidly surpassing all other competitors in the field.
So far, the dominant advantage in deployments compared to other alternatives has reached an astonishing 71.9%, demonstrating the widespread popularity and far-reaching influence of the application. Recent momentum has quickly propelled it into the mainstream, with many new users from TikTok joining in, eager to scale it up and fuel the fire further.
3. All Roads Lead to Raydium
Whether it is a secret launch, a pump.fun release, or a presale token, the vast majority of meme coin liquidity pools come from Raydium. The influx of a large number of memes into the market increases its market share, with decentralized exchanges occupying a significant portion of Solana's current on-chain trading volume.
In the gold rush, those who sold shovels to speculators often reaped the most rewards. This analogy also applies to the current situation. Regardless of how well meme coins perform, the platforms that facilitate trading activities will benefit immensely from the trading volume generated by increasing speculation. Many things and common sense indicate that only a few tokens garner attention, while the rest are destined to gradually fade from view. This view can be confirmed or refuted simply by observing the market cap distribution of all existing trading pairs.
Due to the lack of effective tagging methods by data providers, distinguishing between memes and non-memes on a larger scale is quite challenging. Upon careful consideration, the method used to curate the comprehensive dataset is to collect information on all Raydium liquidity pools with non-zero liquidity (as of November 25, 2024), excluding official token lists and legitimate projects in CoinGecko. The remaining 493,203 pools contain 474,161 unique address tokens, which will form the basis for the analysis in this section.
Most tokens at any point during their lifespan, even with very little activity, often fall within the range of $100,000 to $10,000, forming noticeable peaks in the early and mid-stages. It is evident that the chart forms a gradually smoothing downward tail—highlighting a few tokens with high valuations, which is expected given the challenge of maintaining a moderate market cap in such an attention-driven environment. While this example includes the entire dataset, it is also worth exploring the potential structural distribution differences between tokens originating from pump.fun and those directly deployed to Raydium.
Looking at the two separately can provide important insights into the overall distribution's distinct patterns, as well as their respective performances, showcasing unique characteristics.
pump.fun
Please note that pump.fun tokens require exceeding a certain market cap threshold to obtain liquidity pools, and due to the greater liquidity provided at issuance, their values are generally higher, often ranging from $5,000 to $15,000. This indicates that most released tokens cannot maintain or exceed the market cap prior to migrating to Raydium. Many of these tokens also fall within a mid-range (hundreds of thousands to a few million), as the deployment pipeline somewhat filters out unappealing memes, allowing the community to leverage the reputation or traction gained during this process on the platform as a growth catalyst.
Direct Deployment
In the lower market cap band, there remains a noticeable density, indicating that many smaller, less ideal tokens struggle to gain significant traction. Part of the reason may be due to saturation, the timing of these tokens being introduced to the market being poorly timed, or a clear lack of narrative, originality, and appropriate publicity. Although it is not obvious, the extremely high market cap meme density listed on multiple centralized exchanges is more concentrated, as these memes had already appeared before pump.fun.
In our dataset, the aggregation around lower market cap tokens confirms the above views. While the trend exhaustion and the inevitable burst of speculative bubbles are significant obstacles for any token, inconsistent incentives largely led to the collapse of many meme moments and their subsequent demise. Anonymous scammers misled their users, while those so-called 'developers' with ulterior motives normalized blatant fraud in the field, causing many seemingly promising concepts to be stillborn shortly after their birth. Upon closer inspection, a large portion of tokens was intentionally set up for a failed outcome, aiming to extract maximum value from unsuspecting speculators, which remains a persistent threat to those who bravely take risks at the table.
In just the past 30 days, nearly two-thirds of tokens were slaughtered within the initial 24 hours, with over 90% of available liquidity evaporating. Recovering from such catastrophic events during the birth phase is often impossible, but occasionally, disgruntled token holders will attempt a community takeover by creating new social media accounts, trying to regain lost momentum, and in some cases restarting out of stubbornness or resentment. The results of this are what you would expect, but if done well, it may provide supporters with a decent exit.
4. Conclusion
The meme coin landscape on Solana is both unpredictable and vibrant, characterized by limitless creativity, rampant speculation, and ever-present risks. Platforms like pump.fun and Raydium have become central to this thriving ecosystem, providing opportunities and challenges for participants. While some standout tokens quickly rise, igniting dreams of overnight fame, the sobering reality is that most meme coins fail to sustain their initial momentum, leaving behind a series of shattered hopes. As this speculative frenzy continues, one thing has remained clear: in a world where viral propagation often outweighs facts, a cautious attitude and thorough investigation are crucial. Whether you are a curious bystander or an active participant, navigating the niche market requires a keen eye for trend judgment and a steadfast skepticism towards promises of easy wealth.