- The hype around meme coins has allowed insiders and infrastructure players to earn over $3.6 billion.
- Negative consequences in the segment could undermine the development of the crypto industry.
- Solana’s price may have peaked two weeks ago amid the meme coin hype.
Insiders of TRUMP, MEV participants, Pump.fun, and various DEXs have collectively earned between $3.6 billion and $6.6 billion from the meme coin frenzy on Solana. These calculations were provided by 0xngmi, the co-founder of DeFi Llama.
The expert emphasized that these figures are conservative due to the difficulty of tracking meme coin volumes across AMMs and losses from insider launches.
The distribution is as follows:
- Trading bots and dapps — $1.09 billion
- Pump.fun — $492 million
- MEV — $1.5 billion-2 billion
- TRUMP insiders — $0.5 billion-1 billion
- AMM (Raydium, Meteora, Orca) — up to $2 billion
The profit of one of the main MEV bots for sandwich attacks (front-running) on Solana was ~$500 million.
Profit structure of trading bots:
- Phantom — $120 million
- Photon — $357 million
- BullX — $153 million
- Maestro — $27 million ($102 million across all networks)
- Moonshot — $27 million
- Mevx — $30 million
- Bonkbot — $168 million
- gmgn — $38 million
- Trojan — $166 million
Root Causes
According to 0xngmi, in previous cycles, traders went to CEXs like Binance and paid 0.1% for each trade in fees. Now, those targeting TRUMP trades are using MoonShot, where the fee is 2.5%.
According to the co-founder of DeFi Llama, market participants see meme coins as an ”unstable casino” and want to ”cash in” before the ”music stops.”
While Binance is interested in maximizing user retention because it focuses on the long-term development of cryptocurrencies, Moonshot does not have such a goal. The goal is to earn as much as possible before customers leave, added 0xngmi.
”It seems that the narrative ‘this is the last cycle’ is forcing everyone to focus on the short term,” the specialist emphasized.
0xngmi recalled that during the previous bull run, OpenSea and NFT royalty recipients earned ~$3 billion.
Later, the focus shifted to the BYAC ecosystem with a peak capitalization of $10 billion and DeFi tokens like AAVE.
”If trading meme coins is a zero-sum game, you need a huge influx to keep it [afloat],” 0xngmi emphasized.
Risks For The Industry
The founder of DeFi Llama presented his reasoning against the backdrop of active discussion of the LIBRA token.
On February 14, after being mentioned on social network X by Argentinian President Javier Milei, the asset reached a capitalization of $4.56 billion, but within the next few hours, its price collapsed by 94%.
After the crash, Milei deleted the promotional post and clarified that he simply ”supported a private initiative” and accused political opponents of using the incident to harm him.
According to Lookonchain, eight wallets associated with the project withdrew liquidity of more than $107 million (57.6 million USDC and 249,671 SOL). According to Bubblemaps, 82% of the project’s supply was unlocked and available for sale from the start. Some Argentinian politicians are threatening the president with impeachment due to his connection with the failed token.
https://coinpaper.com/7532/bubblemaps-uncovers-evidence-linking-libra-and-melania-meme-coins
0xngmi expressed concern about the current hype:
”If most of society begins to perceive cryptocurrency as purely evil, or if the consequence is stricter regulation, we will find ourselves in a situation where the negative effects of meme coins spread and prevent the prosperity of other ideas like sovereign money or trust minimization.”
In conclusion, 0xngmi cited the opinion of DeFi enthusiast Patrick Scott (Dynamo DeFi) that the Solana course peaked two weeks ago.
The latter found that every time revenues from dapps (highlighted in purple) jumped, SOL approached a local peak (yellow). The same pattern occurred two weeks ago.
It is worth noting that the founder and former head of the Binance exchange, Changpeng Zhao, provoked a wave of meme coins dedicated to his Belgian Shepherd dog named Broccoli.
https://coinpaper.com/7386/cz-criticizes-binance-token-listing-process-and-calls-for-change
This article was originally Posted on Coinpaper.com
