Author: Ansem Source: X, @blknoiz06 Translation: Shan Ouba, Jinse Finance
This topic has been discussed for a while, so let me provide some background information.
Every Altcoin that is listed directly on a decentralized exchange (DEX) and has no venture capital support has three major elements:
- development team
- Sniper
-Giant Whale(To be determined)
The complexity and overlap of these three vary from coin to coin, but for a coin to perform well over the long term, a good combination of all three is required.
development team
There is a sliding scale between decentralized and organized for each development team. On pump.fun, a development team might be just one person with a photo and a caption, while a team like $BONK is very organized and has some of the smartest active crypto traders on Solana. Both types of teams can perform well, but it also depends on two other things (snipers and whale) to determine whether a project can succeed in the long term.
The advantage of organized teams is that they usually have a budget for marketing and future development, so these coins can have more "utility" than a meme coin that originated solely on pump.fun. A good example is bonkbot, no other fully decentralized meme coin would have such a product because they didn't have the funds to develop it. Another example is $MEW, which was able to airdrop a large amount of supply to all $BONK and $WIF holders. These teams also usually have easier access to market makers and quick exchange listings.
On the other hand, fully decentralized teams usually start with lower market caps because there are no vested interests on the deeply capitalized side at the outset. These teams usually form loyal communities early on because of the extremely low cost base of early participants and the wide distribution of all coins. I think the best examples are $WIF and $MICHI, which have very active communities and very low market caps at launch. The risk with these coins is that they are more likely to fail early on on average due to all the snipers trying to exit as quickly as possible and without any whale or teams with a vested interest in the long-term performance of the project.
If anyone can provide background information on $DOGE and $SHIB, please include that in the citation.
Sniper
Honestly, I'm not the best person to discuss this topic in detail because I don't participate in early sniping, but I know some people who do. For snipers, they usually don't care what the project is, they just want to get in early and exit immediately if there is enough liquidity. Many projects without an organized team will die because of this, because if there is a large amount of supply at the launch that is bought by snipers and sold immediately, it will destroy the chart.
A good example is the ETHWIF derivative that launched a few months ago, where many wallets bought it immediately when it went live and sold it a few hours later, making a six-figure profit.
90% of DEX listed coins will never exceed a market cap of $5 million due to the fact that most development teams are anonymous and happy to make a quick profit, which is why the “community takeover” (CTO) narrative is so popular as developers usually sell immediately.
Whale
Every coin that goes from 0 to billions needs whale at some point to drive the price up. For meme coins, it’s usually the community that forms early on, and then once the meme reaches escape velocity in attention and virality, it reaches a market cap of over $100M. Once they are able to consolidate at over $100M, you see larger players start to position because there is enough liquidity to build large positions. Additionally, these early adopters of the meme must be committed holders who don’t sell after they become whale, thereby holding onto a low cost base of coins. These loyal community holders are just as important to the project as all the other factors.
in conclusion
In short: every coin has a team, the team is organized to varying degrees, every coin has snipers and whale. To reach a multi-billion dollar market cap requires a very lucky combination of all three, whether they are the same party or different parties.
