Vincent Gramoli

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School of Computer Science
1, Cleveland St.,
NSW 2006 Sydney

The Tragedy Of Meme Coins

01 Mar 2025 - Vincent

The memecoin frenzy has attracted the interest of political figures like the US President, the Argentinian President and the US first lady who launched their tokens on the Solana platform. Despite a sudden influx of liquidity following the call on X of these influencial figures, the token prices have dropped within few days of their launch. This type of speculative activity in the current anonymous/pseudonymous Solana environment can have dramatic impact on diplomatic influence. This is why, as I briefly referred to in a recent podcast [1], safer blockchain environments, like Redbelly Network, should play a regulating role.

The Solana platform has become popular to launch memecoins, a form of cryptocurrency token created to engage a community around a trend, humorous or fun topic, often accompanied by websites of comical themes with nonsensical terms. The success of such tokens for speculative purpose and pump-and-dump acitivities, has attracted political interest but has recently backlashed, impacting Solana platform valuation, losing 40% of its TVL whithin a month.

On 17th January, the TRUMP token was launched and Donal Trump, who had already won the election for American Presidency, asked explicitly people on social media to “Join [his] very special Trump Community. GET YOUR $TRUMP NOW.” As a result, traders sold their holdings to buy TRUMP tokens which transferred liquidity from existing tokens to TRUMP. The price of TRUMP trippled to reach $14 billion in total value shortly after the launch. According to the media, a Trump company, CIC Digital LLC, owns 80% of the token’s supply [2].

The TRUMP token is now referred to as a meme coin. The reason is that the address that created the coin, 6p6xgHyF7AeE6TZkSmFsko444wqoP15icUSqi2jfGiPN, also holds memecoins like “Mark Cuban Meme”. These coins are identified by addresses ending with “pump”, which seeminlgy indicates that they were produced with the pump.fun launchpad, which is known to faciliate the launch of memecoins on the Solana blockchain platform [3].

On 18th January, the MELANIA token was launched. This token was marketed by MKT World LLC, a Florida-registered company owned by Melania Trump, who is now the first lady of the United States. At launch time, she posted on X “The Official Melania Meme is live!”. The total value raised to $1.6B rapidly after the launch. Few days later, the price of both TRUMP and MELANIA tokens dropped by 70% and 43%, respectively.

On 14th February at 21:38 UTC, the LIBRA token was launched. At 22:01 UTC, the Argentinan President Javier Milei described it on X as a way to incentivize the growth of the Argentina economy by funding small businesses and Argentina ventures. Within the next hour, the token’s price surged to a peak of $4.55 before falling right after.

Among the 15,431 wallets that experienced a gain or a loss of at least $1000 in the $LIBRA token, 86% lost a cumulative amount of $251M whereas 2,101 wallets gained $180M [4]. 37 of these wallets were quick to start trading, two of which bought at around 22:01 UTC and finished selling at 22:44 UTC on February 14th, realizing a gain of $5.4 million.

As the platform facilitating this token speculation, Solana lost 41.5% of TVL within about a month. On February 14th, when the LIBRA situation unfolded, SOL started dropping and was down by 16% five days later. Solana also experienced a liquidity outflows dropping from $12.1B on 20th January to $7B on 25th February [5].

Tragedyhttps://tinyurl.com/5n79676m

The problem is that Solana, just like most blockchains, do not identify the traders and these tokens are open for investment to anyone, be it a child, an AI bot or a sanctioned country governor. By acquiring a substancial part of the token supply, any wealthy organisation could threaten of dropping the token price by dumping its supply on an exchange. Dropping the TRUMP token price by a couple of billions dollars would translate the US president company, CIC Digital LLC, to lose big time. It would therefore be in the interest of the US President to respond to this threat by entering negociations with any such wealthy organisation.

Redbelly Network [6] is inherently designed to prevent anybody from exercising this type of destabilising influence. It relies on a markpetplace of identity providers to guarantee that a human adult or an instituion is accountable for any wallet used in the network. Not only does this accountability incentivize users to behave ethically, but it allows an application developer to program the type of organisation that can invest in a token. This is instrumental in prohibiting, for example, a sanctioned country from investing in the current President memecoin. It is now time to switch to a safer environment while trading assets, otherwise what once were funny memecoins will certainly become a tragedy.

[1] RedBelly Network, The FUTURE of Fintech TODAY. https://youtu.be/cXe_FwZj1Qk?feature=shared

[2] Melania Trump launches meme coin as crypto conflicts worry experts. January 2025. https://www.theguardian.com/technology/2025/jan/20/donald-trump-meme-coin-price-melania-token

[3] Tracing $TRUMP: The Latest Memecoin on Solana. 21st January 2025. https://www.trmlabs.com/post/tracing-trump

[4] LIBRA - The Aftermath. 19th February 2025. https://research.nansen.ai/articles/libra-the-aftermath

[5] DefiLama Solana - Accessed on 28th February 2025. https://defillama.com/chain/Solana

[6] Redbelly Network - Accessed on 28th February 2025. https://redbelly.network/