Author: hyphin, On Chain Times
Translation: Jinse Finance xiaozou
1. Introduction
Since our last meme coin article (in March this year), the total market size and market share of the industry have maintained continuous growth, showing no obvious signs of stagnation. Undoubtedly, it is the fastest horse on the track.
This phenomenon can be attributed to the viral spread of social media (its inherent characteristics), the extremely low entry barriers, and the constant emergence of fresh narratives that attract speculators, although 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 for gains while maintaining loyalty to high-conviction bets and making them more enduring. While some may be reluctant to admit it, in the current market environment, the likelihood of long-standing meme coins that have been thoroughly tested by the market disappearing is lower than that of assets driven solely by impressions, providing no substantive value (limited to capital transfer).
Although Solana may not be the sole contributor to the total market cap of these massive tokens, much of the activity in the sector indeed occurs within its chain's 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 native token incubation platform on Solana), the local market dynamics have undergone a significant shift. Interacting with speculative tokens has become simpler, cheaper, and safer (in terms of security). Through a user-friendly interface, standardized token deployment in a controlled environment allows anyone to create new tokens based on common configurations, thereby eliminating the risk of abuse from potential malicious actors hidden within smart contracts. This actually only requires the deployer to provide some creative input, without any technical knowledge necessary. Abstracting away all complexities allows for a focus 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 released to the market.
About 1 in every 100 tokens 'graduates' from pump.fun, due to massive saturation and limited liquidity, as well as other reasons beyond the scope of this article. Those who step onto the stage must showcase something interesting and uniquely shocking to capture the attention of the warriors in the trenches. Despite these challenges, the protocol quickly established itself as a true gateway for trading micro-cap tokens and launching new tokens, rapidly surpassing all other competitors in the field.
So far, the deployment dominance advantage compared to other alternatives has reached an astonishing 71.9%, demonstrating the wide popularity and far-reaching influence of the application. Recent momentum has allowed it to rapidly become mainstream, with many new users from TikTok joining in, ambitiously aiming to scale it up and fan the flames further.
3. All roads lead to Raydium
Whether it is a secret release, pump.fun release, or pre-sale token, the vast majority of meme coin liquidity pools come from Raydium. A large influx of memes into the market increases their market share, with decentralized exchanges accounting for a considerable portion of Solana's current on-chain trading volume.
In the gold rush, those selling shovels to speculators often reap the most rewards. This analogy applies to the current situation as well. Regardless of how well meme coins perform, platforms that facilitate trading activity will benefit enormously from the trading volume generated by an increasing amount of speculative activity. Many things and common sense suggest that only a few tokens will garner attention, while the rest are destined to gradually fade from view. This perspective 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 difficult. After careful consideration, the method used to curate the comprehensive dataset is to gather information on all Raydium liquidity pools with non-zero liquidity (as of November 25, 2024), excluding official token listings and legitimate projects in CoinGecko. The remaining 493,203 pools contain 474,161 unique address tokens, which will serve as the basis for analysis in this section.
Most tokens at any given moment during their lifespan, even with very little activity, often fall within the range of $100,000 to $10,000, forming significant peaks in the early and mid-stages. Clearly, the chart shows a gradually smoothing tail—highlighting a few tokens with high valuations, which is expected, as maintaining a moderate market cap in such an attention environment is challenging. While this example includes the entire dataset, it is also worth exploring potential structural distribution differences between tokens originating from pump.fun and those directly deployed to Raydium.
Looking at both separately can provide important insights into the overall distribution's significant patterns, as well as their respective performances, showcasing unique traits.
pump.fun
Please note that pump.fun tokens need to exceed a certain market cap threshold to gain liquidity pools; since more liquidity is provided at issuance, their values are usually higher, often in the range of $5,000 to $15,000. This indicates that most released tokens cannot maintain or exceed their market cap prior to migrating to Raydium. Many of these tokens are also in mid-range (hundreds of thousands to a few million) because the deployment pipeline filters out unappealing memes to some extent, allowing the community to leverage the reputation or traction gained in this process 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, poor timing of these tokens' market introduction, or a clear lack of narrative, originality, and appropriate promotion. Although it's not very obvious, the extremely high market cap meme density listed on multiple centralized exchanges is more concentrated, with these memes having emerged long before pump.fun.
In our dataset, the aggregation around lower market cap tokens confirms the above view. While trend exhaustion and the inevitable bursting of speculative bubbles present huge obstacles for any token, inconsistent incentives have largely led to many meme moments collapsing and subsequent disappearances. Anonymous scammers mislead their users, while those with ulterior motives, so-called 'developers', normalize overt fraud in the field, causing many seemingly promising concepts to be stillborn shortly after their inception. Upon closer inspection, it is found that a significant portion of tokens were deliberately set up for a failing outcome, in order to extract maximum value from unsuspecting speculators, posing a continuous threat to those brave enough to 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 period is often impossible, but occasionally disgruntled token holders will conduct a community takeover by creating new social media accounts, attempting to regain lost momentum, and in some cases out of stubbornness or resentment starting anew. The outcome of such actions is what you might expect, but if done well, it could provide supporters with a decent exit.
4. Conclusion
The meme coin landscape on Solana is both unpredictable and vibrant, composed of limitless creativity, rampant speculation, and ever-present risks. Platforms like pump.fun and Raydium have become central to this thriving ecosystem, offering opportunities and challenges to participants. While some prominent tokens have risen quickly, 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 spread 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 firm skepticism towards promises of easy wealth.
