Behind the Meme Coin Craze: A Look at How Memecoin Ecosystem Tools Profit
Meme Coin Craze: How Memecoin Tools Profit
Memecoin has always been a hot topic in the blockchain world, attracting the attention of many traders. Dreams of overnight riches and short-term speculation have driven many people to rush in.
In April of this year, $PEPE, which emerged out of nowhere, rose by tens of thousands of times in just 19 days and was listed on Binance, becoming the fastest token ever to reach a market capitalization of $1 billion. The emergence of $PEPE also triggered another wave of Memecoin Season in the crypto world, with various dog tokens on the chain skyrocketing and gas fees soaring. Every day, new coins that have risen tens of times appear, and this trend has continued for nearly two months, until the end of June when it began to calm down.
From the meme attributes and community culture of token naming or avatar itself, to the influence of social media and celebrity endorsements, and the nature of low market capitalization and high volatility, Memecoin has become an attractive choice, but at the same time, it is accompanied by high risks. High volatility means that in addition to rising, falling and even disappearing is also common, coupled with celebrity endorsements, big players controlling the information, and other factors, making Memecoin an easy but difficult field to master.
So as a retail investor, what projects are worth tracking and paying attention to without investing in Memecoin itself? As the Memecoin field has developed, in addition to numerous tokens, many projects that serve Memecoin have also emerged, forming a unique Memecoin ecosystem. These projects are not backed by VC investments, most of them started as community projects, have unremarkable backgrounds, but have persisted to become profitable entities with stable customer sources.
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Today, DODO Research will introduce five tools or platforms that are used by many Memecoin project parties or retail investors when participating in Memecoin, and analyze their sources of profit.
1. Pinksale
Project Introduction
Pinksale is a presale platform, and “pink presale” often mentioned in the dog community refers to Pinksale. Its main feature is that everyone can issue coins and set presale rules, providing the most basic technical support for Memecoin project parties. With Pinksale, project parties can focus on community operations and community marketing, and complete one-click issuance without any code foundation.
In addition to the projects presold on Pinksale, the platform guarantees that liquidity will be deployed and that there will be no absconding with presale funds, which has led many retail investors to only participate in presale activities initiated on Pinksale.
Profit Model and Analysis
Pinksale’s main source of revenue is a forging fee of 0.01 ETH / 0.2 BNB, as well as 5% ETH / BNB of the total fundraising amount for presale tokens.
We analyzed its collection address 0x4b04213c2774f77e60702880654206b116d00508, and over the past six months from 2023 to now, Pinksale has earned nearly 8M USD in revenue (the left side of the figure below is ETH and the right side is BSC), with the recent three months of crazy Memecoin Season bringing in 6.4M USD for them. It can be seen that the quality of the Memecoin market has a huge impact on the protocol’s revenue, and analyzing the two chains of ETH and BSC reveals that Memecoins launched on the platform are more popular on BSC than on the Ethereum mainnet, possibly due to the fact that most Memecoins on the Ethereum mainnet choose a fair launch or their own presale channel.
Source: https://dune.com/owen05/account-value-flow
In addition, Pinksale has also issued governance token $PINKSALE, according to official documentation, the only information available for this token is its unlocking information, as well as the statement that 20% of profits will be used to repurchase tokens and burn them every quarter, but no official announcement has been found regarding the repurchase and burning of tokens, making this token more like a useless governance token without any value capture mechanism, and token holders do not share in the project’s profits, which has resulted in Pinksale’s profitability in the first half of 2023 not being reflected in the token price.
Source: https://www.geckoterminal.com/bsc/pools/0x53028de80b359b303178a31741ddf91969ba89ec
2. UNCX Network (formerly Unicrypt)
Project Introduction
UNCX Network, formerly known as Unicrypt and commonly referred to as the Green Horse in the Chinese community, primarily provides lockup pool services. Memecoin tokens generally choose to deploy liquidity on AMM DEX, and the liquidity is the only basis for the value of the token, so the ability to remove liquidity at any time is a major consideration for traders, making UNCX’s lockup pool service almost a must-have for every Memecoin.
When the liquidity of the project party is not locked, few people will take the risk to trade. UNCX, as the earliest platform to propose the concept of lock-up pools and the most famous lock-up platform used by many projects, naturally becomes one of the standards for retail investors to refer to. Therefore, the project party would rather give up other cheaper solutions on the market and choose to pay to lock its liquidity on UNCX.
Profit Model and Analysis
UNCX Network mainly earns 0.08 ETH/0.3 BNB charged for lock-up services and 1% of locked liquidity. Analyzing its payment address 0x997cc123cf292f46e55e6e63e806cd77714db70f, it is found that the profit from early 2023 to now has exceeded 4.5 million USD (the left side of the figure below is ETH and the right side is BSC), and the profit in the past quarter was as high as 2.5 million USD due to the influence of Memecoin Season.
Source: https://dune.com/owen05/account-value-flow
In addition, UNCX has issued governance token $UNCX and reward token $UNCL, but there is no mention of token model and value capture. There are only old-fashioned staking mining and repurchase and burning token mechanism, and there is no record of burning since April 2021. The project’s profit cannot effectively benefit token holders, which also leads to the fact that the price of governance token $UNCX has not changed with the project’s earnings.
Source: https://www.geckoterminal.com/eth/pools/0xe0f0e02a16b45f949b98856b61175e63ca5f6293
3. Dextools
Project Introduction
Dextool is a K-line website and aggregation trading platform. In addition to viewing and trading functions, it also provides various information about tokens, including project introduction, community links, and other content. It also has a trend hot search and banner advertising board. Memecoin project parties can pay Dextools to update token information, and go on the hot search or advertising to provide project visibility.
Although there are already many alternative and free platforms in the market, Dextools, as the oldest K-line aggregation trading website in the market, still maintains its leading position. Paying Dextools is an important indicator for Memecoin players to judge whether a project is sincere in marketing. Therefore, in order to attract people, project parties will still choose to pay Dextools to update token information.
Profit Model and Analysis
The main source of revenue for Dextools is the fee charged to projects for updating token information, which is 1300 DEXT, 3 BNB, or 0.5 ETH. Unlike Pinksale and UNCX, Dextools token $DEXT has a stronger value capture ability. Dextools dynamically adjusts the payment method in $DEXT to ensure that it remains the cheapest payment method. The income paid in DEXT will be regularly destroyed for permanent deflation.
According to our analysis of Dextools’ charging address 0x997cc123cf292f46e55e6e63e806cd77714db70f, Dextools has received a total of approximately 6 million USD in revenue from early 2023 to the present (the left side of the figure below is ETH and the right side is BSC) in the past half year. Since the Memecoin Season ignited by $PEPE in April, it has received nearly 4.7 million USD.
Source: https://dune.com/owen05/account-value-flow
Of the total revenue, nearly one-third of it is paid in $DEXT, benefiting from its deflation mechanism (an average of about 15k $DEXT is destroyed every day). The DEXT has the highest increase of 6 times this year and still has an increase of 4 times after the correction. It is a very promising token for 2023.
Source: https://www.dextools.io/app/cn/ether/pair-explorer/0xa29fe6ef9592b5d408cca961d0fb9b1faf497d6d
4. Maestro
Project Introduction
Maestro is a Telegram chat room bot that provides retail investors with the ability to buy coins quickly and various stop-loss and stop-profit order functions. Users can deposit money into the wallet address provided by Maestro and then trade coins through conversations with the bot on TG. Due to the high volatility of Dogecoin, trading speed has a significant impact on returns. Therefore, Maestro is a tool designed for professional Memecoin players.
However, users should be very careful when using this type of tool and should not invest large amounts of money to avoid losses due to private key leakage concerns.
Revenue Model and Analysis
Maestro’s revenue model involves collecting a 1% transaction fee from each user’s transaction amount. Once a user’s accumulated transaction fees reach 0.01 ETH, the fees are automatically transferred from the user’s address to Maestro’s collection address. According to data from Defillama, Maestro’s cumulative revenue is expected to reach nearly 12 million USD by 2023. In the past three months, during the Memecoin Season, Maestro has received nearly 10 million USD in revenue, making it one of the most profitable projects of the quarter.
Source: https://defillama.com/protocol/maestro
Although Memecoin has cooled down relatively in the past month, Maestro still ranks 11th in the Defillama fees and revenue leaderboard, surpassing many well-known Defi protocols such as Metamask, Compound, and Curve. Even public chain projects such as Arbitrum, Optimism, Avalanche, and Polygon can only look up to it.
Source: https://defillama.com/fees
5. Unibot
Project Introduction
Unibot is a TG trading robot with the same business content as Maestro. There is no difference in product functions. The only difference is that Maestro did not issue tokens, while Unibot has its own token, which has a token dividend mechanism. Retail investors have the opportunity to share the value captured by the protocol with the project party, and Unibot has a referral system, so it has relatively high visibility in the Twitter community. The next stage of the team’s roadmap is to cooperate with GMX and Dopex, and the TG robot will be able to use GMX’s perpetual contract and Dopex’s option products.
Compared with the four projects mentioned above, Unibot is relatively young and was launched in May this year, with its products and tokens launched at the same time. Its token uses a fair launch mechanism, with a maximum increase of up to 400 times, making it the god coin of this quarter.
Revenue Model and Analysis
Unibot’s revenue model is the same as Maestro’s, both of which collect a 1% transaction fee from the user’s transaction amount. However, benefiting from Unibot’s token mechanism, $Unibot itself is a taxed token, and 5% of the tokens are required to be paid as tax when buying or selling in transactions, which is also considered as revenue for the project party. Since its launch, Unibot’s cumulative revenue has exceeded 1630 ETH, about 3M USD, of which 166 ETH (300K USD) comes from transaction fee income.
Source: https://dune.com/whale_hunter/unibot-revenue
And two weeks ago, the dividend bonus was implemented, and 40% of the project’s revenue will be distributed to token holders. So far, about 200 ETH (about 380K USD) has been distributed, and $Unibot has risen nearly three times due to the good news.
Source: https://dune.com/whale_hunter/unibot-revenue
Source: https://www.geckoterminal.com/eth/pools/0x8dbee21e8586ee356130074aaa789c33159921ca?utm_source=coingecko&utm_medium=referral&utm_campaign=searchresults
Summary
The five projects introduced above seem insignificant, without a strong background or refreshing innovative mechanism. However, their income is amazing. When the Meme coin market is good, their income can far exceed many Defi and even public chain projects. Having amazing profit-making ability is the common feature of these five projects.
However, it should be noted that a good product is not necessarily a good investment target. From the tokens of the above projects, it can be seen that projects with high profits but without a good token model cannot share project income with token holders. On the other hand, if the token mechanism with profit-sharing design is adopted, projects with such strong profitability are likely to be good investment targets.
