The first layer is an elephant in a tin room. The second layer hides under the elephant. When the window is broken, the elephant will fly into the sky.
The secret to getting rich = innovative asset types + improved capital efficiency
$PUMP's token issuance hype, from noise to silence, has already seen its biggest beneficiary, MemeCore. Its token $M not only topped the CT hot list but also successfully secured Binance Alpha, followed closely by Bonk, which is targeting Chinese users.
When English project teams speak Chinese, it reminds me of the era of SBF, when the world was still united.
Image description: Bonkfun speaking Chinese, image source: @SolportTom
But don't worry, today is not about analyzing the price trends of PUMP, but rather about discussing why Meme platforms issue tokens and how, even after the end of the Meme grand cycle, token issuance can still stir up waves.
Earn the last penny
PumpFun issuing tokens maximizes its value as a Meme platform.
A normal Meme platform should have died when CZ announced the end by bringing FourMeme into the scene. Please note that I am referring to the end of the Meme platform as an industry consensus and a mainstream asset issuance platform. If it is about Meme itself, that can be traced back to the emergence of $TRUMP in January.
The subsequent breakup between PumpFun and Raydium is clear evidence of the split in consensus: you build AMM pools, and I build Meme launch pads.
Image description: PumpFun profit trend, image source: @jphackworth42
It is increasingly strange how, not only does the Pump Fun platform token become the focus after nearly six months, but it can also attract many similar tokens like Bonk and $M to share liquidity. Referring to DePIN, NFT, BTCFi, and L2 tracks, none of them can maintain the explosive traffic of token issuance after the main narrative ends.
A more normal rhythm is to issue tokens directly and drain market liquidity when the industry consensus is most focused.
• For example, the 'positive case' of NFTs is Blur, while the negative case is OpenSea;
• DePIN's Filecoin and Helium (Mobile), the negative is Starpower;
• BTCFi's Babylon, the opposite of a group of BTC L2s
However, the normal liquidity of Meme has been absorbed by $TRUMP. Theoretically, the emergence of FourMeme should have marked the end of PumpFun, but the PUMP token can still stir up the storm.
PumpFun has provided the most perfect exit strategy for the dying track, earning the last penny accumulated in the market.
The creation and expression of crypto assets can be efficiency-oriented, allowing information flow (Kaito) or capital flow (Aave) to move faster and leverage higher, or it can be about innovative expressions, evolving from tokens to NFTs to Meme to stablecoins.
If we are to answer how PumpFun achieved this, we first need to review the successes and failures of NFTs. Unlike inscriptions and BTCFi, which were ultimately disproven, NFTs found their place in the project space.
Genesis NFTs represent the options of the project and are even a kind of Coinlist equivalent, depending on how the project team designs them. NFTs failing as fashion symbols and tickets lead to the success of asset symbols.
The NFT trend will definitely not return. My understanding is that Meme, as an asset sector, will endure.
Just like the imitation season will not return, it does not prevent everyone from continuing to create imitations and earn Alpha points.
The same goes for Meme; people's valuation systems will change. PumpFun won't be Binance, nor will it be Hyperliquid, but isn't Uniswap still alive?
Between complete failure and success, there is also the option of landing safely; right and wrong will leave people to comment.
The next scene that can be realized
Previously, the crypto industry believed that being realized meant moving towards Mass Adoption;
Now, the crypto industry believes that realization is the final act of token issuance;
Image description: Asset issuance and creation path, image source: @zuoyeweb3
Not everyone will be intoxicated by Meme, but as long as there are people willing to participate, then as an asset type and launch platform, it can maintain basic survival. There always needs to be a place for people to buy on-chain Maotai and virtual $LABUBU.
From blue-chip NFTs to Genesis NFTs, from $TRUMP to $PUMP, an era has come to an end. In the small cycle of crypto, Meme lasted for six months, longer than many technical narratives that lasted only 2-3 months.
The only thing left is the unsolved mystery of the Bonding Curve. We know AMM DEX's x*y=k, but to this day, we still don't know how the specific parameters of the Bonding Curve were derived.
A little-known fact is that FriendTech also uses Bonding Curves. Earlier in the 2020 DeFi Summer, it was actually a triad of AMM, order books, and Bonding Curves. Uniswap took AMM, dYdX took the order book, and Bonding Curves only shone when they met PumpFun.
Another secret left by PumpFun is that the Bonding Curve improves capital efficiency. Meme has never been simply a new type of asset; the capital efficiency orientation of PumpFun as a platform is also the winning strategy in product design.
Referring to @CuntouErjiu's algorithm, the Pump Fun algorithm is a super modification of x*y=k, Bonding Curve equation:
Other Meme launch platforms can reverse-engineer and reference the specific parameters of PumpFun, but how this formula itself was derived has almost become an unsolved mystery in the crypto world, just like AI large models—open-source code is meaningless; only open-source training methods and datasets are truly open-source.
Unfortunately, no one has truly reverse-engineered PumpFun's original formula to this day. Based on this, the moat of PumpFun's capital (Meme) efficiency remains solid. Even if Meme is no longer popular, the remaining traffic can still serve as the value foundation of $PUMP.
On this point, PumpFun is much more reliable than many ghost chains. The exit of USDT from Algorand/EOS shows that what is forgotten is not just Meme.
However, it must be acknowledged that Meme, as a representation of an era, has completely ended. The past glory is already hard to come by, and the only ones that can continue to thrive are BTC and ETH. SOL needs to go through many tests to enter the game.
At least SOL is not recognized by PumpFun. All the earned SOL is converted into U-based capital. EOS has held the BTC it raised until now; which category does the Ethereum Foundation selling ETH belong to?
Conclusion
The current hot topics are RWA and stablecoins. It no longer makes sense to focus on PumpFun, but compared to single products like FriendTech and Blur, Meme will thrive better than NFTs and BTCFi. The ideas of PumpFun are worth referencing.
Starting with the end in mind, founders must design an exit strategy from the very beginning. It is not simply about issuing tokens but answering whether, in the grand stage of crypto and after a sensational breakout, there is still a suitable position to find behind the scenes.
I can predict that Perp DEX will be the same, as we find it difficult to discover the off-chain matching algorithm for order books.
Similar to this, there is also
1. Routing algorithm of DEX aggregators
2. Trading matching algorithm of dark pool DEX
3. Liquidity 'explosion' algorithm for on-chain options products
Especially with on-chain options, it is currently in the same predicament as the previous PumpFun era, where Meme trading is difficult to sustain due to low liquidity. The LP Token subsidy model commonly used by DEX does not seem to be effective.
To say one more thing, the on-chain options product model also needs to be reinvented, either as original crypto products like Meme, or as a reconstruction in the crypto space similar to perpetual contracts. Perhaps VIX is a good idea?
