The first level is a tin room with an elephant in it, and the second level is to hide yourself under the elephant. When the window is poked, the elephant will fly into the sky.

The secret to getting rich quickly = Innovative asset types + Improving capital efficiency

In the whole process of $PUMP coin issuance, noise and silence, the biggest beneficiary has emerged, MemeCore, whose token $M not only occupied the CT hot list, but also successfully won Binance Alpha. The second is Bonk, which followed closely and targeted Chinese users.

The English project party spoke Chinese, which reminded me of the SBF era, when the world was still a harmonious place.

 Image caption: Bonkfun speaks Chinese Image source: @SolportTom

But don’t be nervous. Today we are not analyzing the price trends of PUMPs. Instead, we want to talk about why the Meme platform issues coins, and why issuing coins can still create waves after the Meme cycle ends.

Earn the last penny

 PumpFun's coin issuance is to maximize its value as a Meme platform.

The normal Meme platform should have died when CZ entered the market with FourMeme. Please note that I am talking about the end of the Meme platform as an industry-wide consensus and as a mainstream asset issuance platform. If it is Meme itself, it can be traced back to the launch of $TRUMP in January.

The subsequent breakup of PumpFun and Raydium, you building the AMM pool and I building the Meme launch pad, are all clear evidence of the split consensus.

 Image caption: PumpFun profit trend Image credit: @jphackworth42

It is getting more and more strange. How come in the past six months, not only has the Pump Fun platform coin become the focus of the whole audience, but it has also attracted many similar ones such as Bonk and $M to share liquidity? Referring to the DePIN, NFT, BTCFi and L2 tracks, basically, they will not be able to maintain the huge traffic at the time of coin issuance after the main narrative ends.

A more normal rhythm is to directly issue coins to drain market liquidity when industry consensus is at its peak.

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

• Filecoin and Helium (Mobile) from DePIN, and Starpower from the reverse;

• BTCFi’s Babylon, and a bunch of BTC L2s on the other side

However, the normal liquidity of Meme has been sucked away by $TRUMP. In theory, the emergence of FourMeme should be the death of PumpFun, but the PUMP token can still stir up the storm.

PumpFun provides the most perfect way to exit the dying track and earn the last penny accumulated in the market.

There are two ways to create and express crypto assets: one is efficiency-oriented, making the information flow (Kaito) or capital flow (Aave) faster and with higher leverage; the other is innovative expression, developing along the lines of tokens - NFTs - Memes - stablecoins.

If we want to answer how PumpFun did it, we must first review the success and failure of NFT. Unlike the tracks such as Inscription and BTCFi that were eventually falsified, NFT has found its own place in the project field.

Genesis NFT represents an option for the project, or even some kind of Coinlist analogue, depending on how the project is designed. The failure of NFT as a fashion symbol and ticket will lead to the success of an asset symbol.

The NFT trend will definitely not come back, and my understanding is that Meme will exist as an asset sector.

Just like the copycat season will never come back, it will not affect everyone to continue to release copycats and earn Alpha points.

The same is true for Meme. People’s valuation system will change. PumpFun will not be Binance, nor will it be Hyperliquid, but isn’t Uniswap also alive?

Between complete failure and success, there is also the choice of landing safely. The right and wrong, merits and demerits will be left for the world to judge.

The next landing scene

Previously, the crypto industry believed that the path to implementation was towards Mass Adaption;

Now, the crypto industry believes that landing is the final step in completing the coin issuance;

 Image caption: Asset issuance and creation path Image source: @zuoyeweb3

Not everyone will be obsessed with Meme, but as long as someone is willing to participate, then as an asset type and launch platform it can maintain basic survival, and there will always be a place for people to buy on-chain Moutai and virtual $LABUBU.

From blue chip NFT to Genesis NFT, from $TRUMP to $PUMP, an era has ended. In the small crypto cycle, the Meme lasted for 6 months, which is longer than many technical narratives of 2-3 months.

The only thing left is the unsolved mystery of the Bonding Curve. We know that x*y=k of AMM DEX, but we still don’t know how the specific parameters of the Bonding Curve are obtained.

A little-known fact is that FriendTech also uses Bonding Curve. Earlier in the 2020 DeFi Summer, it was actually a Three Kingdoms battle between AMM, order book, and Bonding Curve. It was just that Uniswap took away AMM, dYdX took away the order book, and Bonding Curve did not shine until it met PumpFun.

Another secret left by PumpFun is that Bonding Curve improves capital efficiency. Meme has never been a simple new type of asset. PumpFun’s capital efficiency orientation as a platform is also a winning formula in product design.

Refer to @CuntouErjiu's algorithm. The Pump Fun algorithm is a super modification of x*y=k. The Bonding Curve equation is:

Other Meme launch platforms can reversely infer and refer to the specific parameters of PumpFun, but how this formula itself is derived has almost become an unsolved mystery in the cryptocurrency circle. Just like AI big models, open source code is meaningless. Only open source training methods and data sets are truly open source.

Unfortunately, no one has really decompiled PumpFun's original formula so far. Based on this, PumpFun's moat for improving capital (Meme) efficiency is still solid. Even if Meme is no longer popular, the remaining traffic can still serve as the value basis of $PUMP.

In this regard, PumpFun is much more reliable than many ghost chains. The withdrawal of USDT from Algorand/EOS shows that it is not the Meme that is being forgotten.

However, it must be admitted that Meme, as a representative of an era, has completely ended. It was not easy to be glorious in the past. Only BTC and ETH can continue to be popular. SOL needs to go through many tests if it wants to join the market.

At least SOL is not recognized by PumpFun. All the SOL earned was converted into U-standard capital. However, EOS has held the raised BTC until now. Which category does the Ethereum Foundation's sale of ETH belong to?

Conclusion

The current hot spots are RWA and stablecoins. It is meaningless to keep a close eye on PumpFun, but PumpFun will do better than single products such as FriendTech and Blur, and Meme will do better than NFT and BTCFi. PumpFun's ideas are worth learning from.

Starting from the end in mind, the founder must design an exit path from the beginning. It is not simply about issuing coins on an exchange, but the question is whether he can still find a suitable position behind the scenes on the big stage of encryption after becoming popular.

It can be predicted that the same will happen with Perp DEX, as it is difficult for us to discover the off-chain matching algorithm of the order book.

Similar to this, there are

1. Routing algorithm of DEX aggregator

2. Dark Pool DEX Transaction Matching Algorithm

3. Liquidity “detonation” algorithm for on-chain options products

Especially on-chain options, which are now facing the same dilemma as Meme trading in the pre-PumpFun era, where liquidity is too low, and the LP Token subsidy model commonly used by DEX does not seem to work.

One more thing, the on-chain options product model also needs to be reinvented, either an original crypto product like Meme, or a cryptocurrency transformation similar to perpetual contracts. Maybe VIX is a good idea?