The performance of Memecoins is concerning. Dogecoin (DOGE) has dropped 60% from its peak in 2024, Pepe (PEPE) has fallen 73% from its all-time high, and Dogwifhat (WIF) has plummeted 88%. Moreover, the market's downturn is intensifying.
Author: Ryan S. Gladwin
Translated by: Baihua Blockchain
The number of tokens launched on the popular launch platform and cultural hub Pump.fun has decreased by 64.6% compared to the peak in January. Meanwhile, according to Dune, the weekly graduation rate of tokens has also dropped to its lowest level since July 2024. The so-called "graduation" refers to tokens reaching a certain market cap threshold, which was previously set at $69,000 but has been raised to $100,000 since the end of last year.
This period of silence has led some traders to believe that the Memecoin casino has closed and will never reopen. Loopify (pseudonym), founder of the crypto education platform Pluid, and a trader believe that the Memecoin cycle has ended. He pointed out that some data shows the Memecoin craze has surpassed the peak of the last NFT bull market.
According to Dune, since its launch in 2017, the most popular NFT market OpenSea has generated $943 million in revenue, while Pump.fun has surpassed $574 million in revenue since its launch in January 2024. Not to mention the revenue generated by trading bots, market makers, and other protocols that are crucial to the Meme coin economy.
After seeing these statistics, others believe it is time to abandon Pump.fun as the center of the Memecoin ecosystem.
"The era of Pump.fun is over," said pseudonymous trader and WIFToken deployer Solana Bateman in an interview with Decrypt. "They have never given back anything while extracting too much." He added, "The difference between us and them is: we care about Solana, which is our home. They only care about filling their own pockets."
Such accusations often point to this launch platform, with opponents arguing that it has not done enough to develop the market and has simply sold off all the SOL generated by the platform—though the founders deny this claim. Bateman stated that the platform could improve by enhancing token economics, creating better liquidity pools, or providing more sustainable models, such as increasing token unlocks at specific market caps.
"I also agree that Pump.fun's model is far from perfect, and I know the team has been working hard to find ways to improve," said Alon Cohen, co-founder of Pump.fun, in an interview with Decrypt.
"After launching a token, the design space for managing user incentives is vast, so refining this takes time. However, from day one, Pump.fun has adhered to some principles that I believe are still effective today."
Cohen stated that these principles include maintaining a low entry threshold when creating tokens while pursuing "simplicity and elegance," as complexity can push retail investors away. He also added that he believes Pump.fun's standardized contracts have a "great positive impact" on the ecosystem, as they reduce the risk of developers creating malicious contracts and being abused.
How did we get here?
The collapse of Memecoins can largely be traced back to the launch of Donald Trump's official Memecoin, just days before his inauguration in January. The market was filled with fervor, and speculators declared that Memecoins and cryptocurrencies had entered a new era.
The next day, Melania Trump also launched her own token, leading to a crash of TRUMPToken—while MELANIA quickly followed suit. The sentiment shifted rapidly, and traders began to realize where the "scams" lay. According to DEX Screener, TRUMPToken has dropped 85% from its all-time high, while MELANIA has seen a decline of 94%.
These launched tokens siphoned liquidity from Memecoin traders, creating a large number of losers, said Rennick Palley, founder of hedge fund Stratos, in an interview with Decrypt. In the following months, more large Memecoin tokens experienced wild fluctuations within 24 hours—resulting in significant losses for traders.
Notably, LIBRA soared to a market cap of $1.17 billion after being promoted on social media by Argentine President Javier Milei, only to plummet 96% to $40 million within six hours. In the aftermath, widespread insider trading allegations erupted, involving several major protocols and influential figures, and investigators found connections between the issuer of this Memecoin and the team behind Melania Trump's Memecoin.
As claims that Memecoins are a manipulated game continued to brew, fears of the industry's complete corruption reached unprecedented heights. Bateman believes this was the "final nail in the coffin" for Memecoins.
"Initially, [Memecoins] seemed like a casino game," said Nick Vaiman, co-founder and CEO of the analytics firm Bubblemaps, in an interview with Decrypt. "But in reality, it was far worse: the game was rigged from the start." He explained, "Your chances of winning are almost zero because the real winners are predetermined: those who know the insider information, the savvy snipers who got in early, and the teams behind them."
For some, this was enough to make them abandon Memecoins and start looking for more stable investments with real value behind them. Pranav Kanade, a portfolio manager at VanEck, stated in an interview with Decrypt that he expects funds to flow out of Memecoins and into "some niche Altcoins," as they can provide more psychological comfort. But not everyone is convinced of this.
"Many people don't like traditional venture-backed Altcoins with grand visions," Loopify told Decrypt, "so they are more likely to stick with single cultural tokens or simply exit the market until new opportunities arise."
Crypto trader Murad Mahmudov has discussed his Memecoin investment theory, which centers on finding "cults" and buying their tokens. However, according to CoinGecko, none of the tokens on his list have seen an increase in the past seven days.
Additionally, macroeconomic pressures are also driving the overall market down. According to TradingView, Bitcoin (BTC) has dropped 17% since the launch of LIBRA, the S&P 500 index has fallen 2.7% in the past month, and the Trump administration's tariff policies have exacerbated market instability.
"Global liquidity has recently decreased, and Memecoins are particularly sensitive to this change," Palley stated, predicting, "It seems liquidity has bottomed out, and Memecoins may see a recovery in the coming months."
Some traders in the market also agree with this view, with pseudonymous Memecoin trader 0xWinged believing that the market has overreacted and predicting that Solana will soon rebound to $170, with market liquidity flowing back into the Memecoin space.
"Ultimately, human nature loves to gamble, and as market liquidity rebounds, I believe the funds participating in gambling will also increase," Palley stated, adding, "Memecoins will continue to exist."
Article link: https://www.hellobtc.com/kp/du/03/5694.html
Source: https://decrypt.co/308218/traders-debate-is-it-game-over-for-solana-meme-coins
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