Pump/Bonk/$M Three Points Meme: Two Paths of Asset Issuance

The secret to getting rich = innovative asset types + improving capital efficiency

In the full process from $PUMP coin issuance to hype and then to silence, the biggest beneficiary has emerged: MemeCore. Its token $M not only topped the CT hot list but also successfully secured Binance Alpha. Following closely is Bonk, which has its sights set on Chinese-speaking users.

The English project team speaks Chinese, which reminds me of the era of SBF, when the world was still united.

Image description: Bonkfun said the Chinese image source: @SolportTom But don’t be nervous, today is not about analyzing the price trends of PUMP, but rather discussing why Meme platforms issue tokens, and how issuing tokens can still create waves even after the big cycle of Meme ends.

Earn the Last Copper Coin

PumpFun’s token issuance maximizes its value as a Meme platform.

The normal Meme platform should have died when CZ announced the end upon entering with FourMeme. Please note, I am referring to the end of the Meme platform as an industry consensus, as a mainstream asset issuance platform. If we are talking about the Meme itself, we must trace it back to the emergence of $TRUMP in January.

The subsequent breakup between PumpFun and Raydium, with you building an AMM pool and me establishing a Meme launchpad, is clear evidence of consensus fragmentation.

Image description: PumpFun profit trend Image source: @jphackworth42 It’s becoming increasingly strange how, not only has the Pump Fun platform token become the focus of attention over the past six months, but it has also attracted many similar tokens like Bonk and $M to compete for liquidity. Referring to DePIN, NFT, BTCFi, and L2 tracks, none of them are likely to maintain the same explosive traffic after the main narrative concludes.

The more normal rhythm is to directly issue tokens and squeeze the market’s liquidity when the industry consensus is most focused.

• For example, the “positive case” of NFT is Blur, while the negative case is OpenSea;

• DePIN’s Filecoin, Helium (Mobile), the opposite of Starpower;

• BTCFi’s Babylon, the counterpart of a group of BTC L2s

However, the normal liquidity of Meme has been absorbed by $TRUMP. Theoretically, the emergence of FourMeme should mark the end of PumpFun, but the PUMP token surprisingly can still stir up the situation.

PumpFun has provided the perfect exit strategy for the extinction track, earning the last penny accumulated in the market.

The creation and expression of crypto assets can be divided into two types: one is efficiency-oriented, allowing information flow (Kaito) or capital flow (Aave) to move faster and leverage higher; the other is innovative expression, evolving along the lines of tokens—NFTs—Memes—stablecoins.

If we want to answer how PumpFun achieved this, we should first review the successes and failures of NFTs. Unlike the tracks of inscriptions and BTCFi, which were ultimately debunked, NFTs have found their place in the realm of project teams.

Genesis NFT represents options for projects, or even something similar to Coinlist, depending on how the project team designs it. As a fashion symbol and ticket, the NFT has failed, leading to the success of asset symbols.

The trend of NFTs will definitely not return; my understanding is that memes as an asset class will endure.

Just like the counterfeit season will not return, it does not affect everyone to continue producing counterfeits and earning Alpha points.

The same goes for memes; people’s valuation systems will change. PumpFun will not be Binance, nor will it be Hyperliquid, but isn’t Uniswap still alive?

Between complete failure and moving towards success, there is also the choice of a peaceful landing, where right and wrong, merits and faults are left for the world to judge.

The Next Usable Scenario

Previously, the cryptocurrency industry believed that being able to land would lead to Mass Adoption;

Now, the cryptocurrency industry believes that landing is the final action to issue tokens.

Image description: Asset issuance and creation path

Image source: @zuoyeweb3 Not everyone will be captivated by memes, but as long as there are people willing to participate, it can maintain basic survival as an asset type and launch platform, always providing 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 crypto mini-cycle, memes lasted for 6 months, which is actually longer than many technical narratives lasting 2-3 months.

The only thing left is the unsolved mystery of the Bonding Curve. We know that for AMM DEX, x*y=k, but we still do not know how the specific parameters of the Bonding Curve are derived.

A fun fact, FriendTech also uses Bonding Curve. Earlier, during the 2020 DeFi Summer, it was actually a three-way battle between AMM, order books, and Bonding Curves. However, Uniswap took AMM, dYdX took the order book, and Bonding Curve only shone brightly when it met PumpFun.

Another secret left by PumpFun is that the Bonding Curve enhances capital efficiency. Meme has never been just a new type of asset. PumpFun’s capital efficiency orientation as a platform is also the key to its product design.

Referring to @CuntouErjiu’s algorithm, the Pump Fun algorithm is a super modification of x*y=k, Bonding Curve equation:

The parameter value is:

Other meme launch platforms can reverse engineer and reference the specific parameters of PumpFun, but how this formula itself is 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 the original formula of PumpFun to this day. Based on this, the moat that enhances the capital (Meme) efficiency of PumpFun remains solid, even if Memes are no longer popular, the remaining traffic can still serve as the value basis for $PUMP.

At this point, PumpFun is much more reliable than many ghost chains, and the exit of USDT from Algorand/EOS indicates that the forgotten ones are not just memes.

However, it must be acknowledged that the era of Meme as a representative has completely ended. It was once glorious, but it is already difficult to maintain. Only BTC and ETH have been able to sustain their success, while SOL still needs to go through many trials to enter the scene.

At least SOL is not recognized by PumpFun, and all earned SOL is converted into U-based capital. However, EOS has held the raised BTC until now. What category does the Ethereum Foundation’s sale of ETH belong to?

Conclusion

The current hot topics are RWA and stablecoins. It no longer makes sense to focus on PumpFun, but PumpFun will perform better than single products like FriendTech and Blur, and memes will outperform NFTs and BTCFi. The approach of PumpFun is worth learning from.

Starting with the end in mind, the Founder must design an exit strategy from the very beginning. It’s not just about issuing tokens on an exchange, but rather answering the question of whether, after gaining popularity in the crypto arena, one can still find a suitable position behind the scenes.

It can be anticipated that Perp DEX will also be like this, as it is difficult for us to discover the off-chain matching algorithm of the order book.

Similar to this, there are also

1. Routing Algorithm of DEX Aggregators

2. Dark Pool DEX Trading Matching Algorithm

3. The Liquidity “Detonation” Algorithm of On-Chain Options Products

Especially on-chain options are now facing the same dilemma as the previous PumpFun era, where meme trading is hard to maintain; the liquidity is too low, and the LP token subsidy model commonly used in DEXs does not seem to be effective.

To add one more thing, the on-chain options product model also needs to be reinvented, either as original crypto products like Meme or as a coin circle transformation similar to perpetual contracts. Perhaps VIX is a good idea?