The cryptocurrency market in December is as cold as the weather.
On-chain trading has been hibernating for a long time, and new narratives are hard to come by. Looking at the arguments and gossip that Chinese CT has been discussing these days, it's clear that there are hardly any players left in this market.
However, the English community has been discussing something new these days.
A meme coin called Snowball launched on pump.fun on December 18, and within four days, its market cap surged to 10 million dollars, reaching new highs; meanwhile, hardly anyone in the Chinese community mentioned it.
In the current environment where there are no new narratives and even meme dogs are not being played, this is one of the few things that stands out and has a bit of a localized wealth effect.
The name Snowball translates to the snowball effect, which is the story it wants to tell:
A mechanism that allows tokens to 'grow larger on their own'.
Turning trading fees into buy pressure, snowballing the market making.
To understand what Snowball is doing, one must first know how tokens on pump.fun typically make money.
On pump.fun, anyone can create a token in a few minutes. Token creators can set a 'creator fee', which simply means taking a certain percentage of each transaction into their own wallet, usually between 0.5% and 1%.
Theoretically, this money can be used for community building and marketing, but in practice, most developers choose to run away once they have enough.
This is also a part of the typical lifecycle of a shitcoin. Launch, pump, harvest fees, run away. Investors are betting not on the token itself, but on the developer's conscience.
Snowball's approach is to not take the money from the creator fees.
To be precise, 100% of the creator fees do not go into anyone's wallet but are automatically transferred to an on-chain market-making robot.
This robot performs three tasks at intervals:
First, use accumulated funds to buy tokens in the market, forming buy pressure support.
Second, add the tokens bought and the corresponding SOL into the liquidity pool to improve trading depth;
Third, each operation destroys 0.1% of the tokens, creating deflation.
At the same time, the proportion of creator fees collected by this token is not fixed and fluctuates between 0.05% and 0.95% based on market value.
When the market value is low, draw a bit more to allow the robot to accumulate ammunition faster; when the market value is high, reduce it to decrease trading friction.
To summarize the logic of this mechanism in one sentence, every time you trade, a portion of the money automatically becomes buy pressure and liquidity, rather than going into the developers' pockets.
Therefore, it is also easy for you to understand this snowball effect:
Trading generates fees → fees turn into buy pressure → buy pressure drives up prices → prices attract more trading → more fees... theoretically, it can self-roll.
On-chain data situation
The mechanism has been explained, now let's look at on-chain data.
Snowball launched on December 18, and it's been four days since then. The market value surged from zero to 10 million dollars, with a 24-hour transaction volume exceeding 11 million.
For a shitcoin on pump.fun, this performance is already considered long-lived in the current environment.
In terms of chip structure, there are currently 7270 addresses holding it. The top ten holders account for about 20% of the total supply, and the largest single holder accounts for 4.65%.
(Data source: surf.ai)
There has not been a case where one address holds two or three percent of the chips; the distribution is relatively dispersed.
In terms of trading data, there have been more than 58,000 transactions since the launch, including 33,000 buy transactions and 24,000 sell transactions. The total amount bought is 4.4 million dollars, sold is 4.3 million dollars, with a net inflow of about 100,000. Buying and selling are roughly balanced, with no one-sided selling pressure.
The liquidity pool holds about 380,000 dollars, half in tokens and half in SOL. For this market cap size, the depth is not thick, and large orders will still have significant slippage.
Another point worth noting is that Bybit Alpha announced the launch of this token in less than 96 hours after its launch, which to some extent confirms the short-term heat.
A perpetual motion machine meets a cold market.
After browsing around, it's clear that discussions about Snowball in the English community mainly focus on the mechanism itself. Supporters' logic is straightforward:
This is the first meme coin that locks 100% of creator fees into the protocol, making it impossible for developers to run away with the money, at least structurally safer than other shitcoins.
Developers are also cooperating with this narrative. Developer wallets, market-making robot wallets, and trading logs are all public, emphasizing 'on-chain verifiability'.
@bschizojew's self-assigned labels are 'on-chain schizophrenia, 4chan special forces, first-generation meme coin veteran', with a self-deprecating degen flavor that resonates well with the native crypto community.
But the safety of the mechanism and whether it can make money are two different things.
The prerequisite for the snowball effect is that there is enough trading volume to continuously generate fees to feed the robot for buybacks. The more trades, the more ammunition the robot has, the stronger the buying pressure, the higher the price, attracting more people to trade...
This is also the ideal state for any meme's so-called buyback flywheel to spin in a bull market.
The problem is that the flywheel needs external power to start.
What is the current environment of the crypto market? On-chain activity is sluggish, the overall heat of meme coins is declining, and there is already little capital willing to invest in shitcoins. In this context, if new buying pressure doesn't keep up, trading volume shrinks, the fees the robot can receive will become less and less, the buyback strength will weaken, price support will diminish, and trading willingness will further decline.
The flywheel can turn forward or backward.
The more realistic problem is that the mechanism addresses the risk point of 'developers running away with the money', but meme coins face risks far beyond this.
Market manipulation, lack of liquidity, and outdated narratives can all occur; any one of these can limit the effectiveness of a 100% fee buyback.
Everyone is scared of being cut. An old brother in the Chinese circle summed it up quite well:
Play is play, but don't get too into it.
There is more than one snowball rolling.
Snowball is not the only project telling the story of this automatic market-making.
Similarly, within the pump.fun ecosystem, a token called FIREBALL is also doing something similar: automatic buybacks and destruction, packaging it as a protocol that other tokens can connect to. But its market cap is much smaller than Snowball's.
This indicates that the market is currently responding to the direction of 'mechanism-based meme coins'.
Traditional methods of making calls, pumping, and community speculation are becoming increasingly difficult to attract funds. Using mechanism design to tell a 'structurally safe' story may be one of the recent tactics of meme coins.
However, speaking of artificially creating a certain mechanism, it's not a new tactic.
The (3,3) of OlympusDAO in 2021 is the most typical case, packaging the staking mechanism with game theory, telling the story that 'if everyone doesn't sell, we can all earn together', peaking at a market value of tens of billions. The later outcome is well known, spiraling down, losing more than 90%.
Earlier, there was also Safemoon's 'tax on each transaction distributed to holders', which was also a mechanism innovation narrative, but was ultimately sued by the SEC and the founder was accused of fraud.
The mechanism can be a great narrative hook, capable of attracting funds and attention in the short term, but the mechanism itself does not create value.
When external funds stop flowing in, no matter how clever the flywheel is, it will also stop turning.
Finally, let's sort out what this little golden dog is actually doing:
Turning the creator fees of meme coins into 'automatic market-making robots'. The mechanism itself is not complex, and the problem it solves is clear: it prevents developers from directly taking the money and running.
Just because developers can't run away doesn't mean you can make money.
If you find this mechanism interesting after reading, and want to participate, remember one thing: it is primarily a meme coin, and only secondarily an experiment of a new mechanism.
