Original | Odaily Planet Daily (@OdailyChina)
Author | Nan Zhi (@Assassin_Malvo)
In 2023, the most outstanding meme token on Solana, besides WIF, is BONK. The main upward trend of the token began in early November 2023, rising from a market value of $20 million to $1.5 billion by mid-December, a 75-fold increase.
Unlike other tokens, BONK does not solely rely on "community building" for its rise; it has begun to "move from virtual to real." In August 2023, Bonk launched a Telegram trading bot on the Solana network, burning BONK tokens by charging bot service fees, with a total of over $10 million worth of BONK burned.
Today, Bonk announced the launch of the BONK ETP "Osprey BONK Trust", which will accept its first batch of qualified investors, aiming to provide a simple and cost-effective way for qualified investors (wealthy individuals) to acquire BONK. Odaily will analyze it in this article.
Interpretation of Osprey BONK Trust
Bonk stated on the product introduction page that the Osprey BONK Trust aims to provide a simple and secure investment in BONK, allowing "qualified investors" to invest in BONK without needing a wallet or private keys.
How many tokens are locked?
The Osprey BONK Trust has a relatively strict definition for qualified investors, including:
Individual annual income must exceed $200,000 (or a combined annual income with a spouse exceeding $300,000), net worth over $1 million;
Investment professionals, such as licensed associates of brokerage firms or investment advisors;
Entities must have $5 million in liquid assets, or all beneficial owners must be qualified investors.
Another key element in the Osprey BONK Trust terms is that the trust will temporarily not provide BONK redemptions, and investors can only sell shares on the secondary market in the near term. Therefore, from the perspective of the token, the purpose of launching this trust is to attract high-quality external funds to purchase BONK and "lock" the tokens in the trust.
So according to the current terms, how many BONK tokens can the Osprey BONK Trust lock at most?
The terms state that each trust share represents 216,999.02 BONK, and the initial outstanding shares are 9,792,000, so at most, 216,999.02 × 9,792,000 = 2.12 trillion BONK will be deposited into the trust, with the current token price at $0.00002273 USDT, equating to a lock-up of $49.3 million, accounting for 3% of the total token supply, which is quite substantial.
Additionally, the trust will have a 2.5% management fee each year, but it has not been disclosed whether this will be used to burn BONK or other methods to increase the token price.
Why is it attractive to external funds?
Some discussions and official responses in the comments section of the trust announcement reveal that the launch of the Osprey BONK Trust has other implications.
User A commented below the announcement asking, what advantages does purchasing BONK through the trust have compared to buying it directly on-chain?
@R89Capital replied, “Memecoin gains from tax-advantaged accounts.” BONK's official account expressed agreement with this reply, and another BONK official, @oskyment, stated, “For example, being able to invest using your 401K.”
(Odaily Planet Daily note: A 401k is a retirement savings plan offered by U.S. employers that allows employees to deduct a portion of their wages and invest it in an account.)
How to understand this? Simply put, purchasing the BONK Trust through accounts like a 401K allows for tax deferral and pre-tax investment deductions, and may provide certain potential tax benefits.
To elaborate, when investing through a 401K account, investment income such as interest, dividends, and capital gains is not immediately taxed within the account until the user withdraws these funds at retirement. Additionally, income that is invested in a 401K or similar account is exempt from taxation.
However, the author believes that in the face of a 2.5% management fee, even with short-term tax benefits, establishing true attractiveness will still require stable and reliable token price performance to support it, which corresponds to Bonk's other core revenue business, BonkBot.
Risk Warning
It is worth noting that the Osprey BONK Trust states in its terms, “All funds have not been registered under the Securities Act, the Investment Company Act of 1940, or any state securities laws. Shares purchased directly from the fund are offered in a private placement under the Securities Act… and similar important exemptions under the laws of the state and region in which they are located, issued and sold only to qualified investors.
Therefore, shares purchased from the fund are restricted and subject to significant limitations on transfer and resale. Potential investors purchasing directly from the fund should carefully consider these liquidity restrictions before making any investment decisions, including the fact that currently, all funds do not offer redemption plans.”
Moving from virtual to real
For most memes, stripping away the shells of community, culture, consensus, etc., their essence remains a "funding scheme" and "attention economy," with all profits coming from later entrants. Especially newly born memes focus more on creating events and attracting attention rather than considering practical development.
However, established memes find it difficult to attract more incremental users, so some tokens have begun to "move from virtual to real." Floki launched RWA product TokenFi (TOKEN), and Bonk launched BonkBot, among others. BonkBot burns about $20,000 to $30,000 worth of BONK daily, and has burned a total of $10.53 million worth of BONK since its launch, becoming an anchor to stabilize its price.
2024 is set to be a big year for memes, with meme tokens reaching market values of hundreds of millions or even billions of dollars emerging in succession. However, many once-popular memes disappear from public view after losing funding attention. Therefore, the direction of "moving from virtual to real" that BONK and FLOKI are pioneering may become one of the core choices for the new generation of memes seeking long-term "survival" in the coming years.
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