Author: @0xmeme4fun
(meme4fun is a platform that is creating memes on sol, and all opinions only represent the author's thoughts.)
Why create a pump.fun clone?
Entrepreneurship itself is an extremely high-risk endeavor, with a 99.9% chance of failure. Choosing the right track can increase the probability of entrepreneurial success tenfold (with a success rate of up to 1%). Is the pump.fun clone a viable track?
My answer is certainly yes. From a business perspective, the competition in the current meme launch platform is insufficient. Pump.fun is the dominant player, and no product, whether on sol or evm layer 2, has reached even 1/10 of pump.fun's scale. No one believes this will be a monopoly market.
The intensity of competition in the pump.fun clone is an order of magnitude less than the past dex/layer 2 competition, and is far less intense than the nft marketplace competition, leaving plenty of room for more players.
From a product perspective, pump.fun has not yet reached the point where many people have enough motivation to do vampire attacks without issuing tokens, and the other content will be discussed below.
VC Funding Environment
Insufficient competition and a large enough market are also the reasons why VCs are willing to pretend to be looking at this track.
But in addition to pretending to be looking at this track, VCs are also pretending to understand meme and pretending to play meme.
Here are two explosive theories:
Currently, the proportion of mainstream VC investors/analysts who have bought any token on pump.fun is not more than 1%, and the proportion of VCs who are truly participating in meme is less than 5%, and they basically have not participated in the early stage.
The way mainstream VCs pretend to understand meme and pretend to play meme is to read such media articles, and the proportion of media editors who seriously experience new products and rush into meme is much higher than VCs.
When you realize this, the first person you should look for when considering your financing strategy should not be VCs, but the real users who are participating on Twitter, as they will better understand the issues in pump.fun and the entire meme ecosystem.
When your product has some interesting features, you will get the most authentic feedback, and the path of community financing will be smoother. Let's fuck VC.
By the way, the backing of top VCs will only help the project's operations and implementation in the short term, and VCs are actually useless in the long run.
Problems with Pump.fun and the meme eco
The first problem is already lying on the surface, just look at a set of data:
The market that has been said to be "NFT is dead" for a year has generated over $100 million in revenue for creators and a similar amount for the platform over the past year.
As the representative of the new creator eco, pump.fun, which is supposed to create new-era entertainment content, has also generated around $100 million in revenue over the past year, but the incentives given to creators are only 0.5 sol on Raydium, with a total fee payout in the millions of dollars, a 100-fold difference.
To replace the old product, the new product needs to make a 10-fold improvement, and this is the opportunity.
The second problem is also on the surface - when will pump issue tokens? What happened to Opensea being taken down by Looks Rare/Blur will definitely happen, and in addition to just having fun with meme, people also hope to make money, so when will the platform token recover?
By the way, although pump has claimed in its public AMA that it will issue tokens, from any perspective, it is not a profitable thing for them to do so. The transaction fees are making money passively, and there is no decent competitor in sight, so the token issuance is more of a threat to the teams that want to do vampire attacks.
The third problem is a long-term one that needs to be solved, and it is also the long-term product planning, the duality of meme's content/asset.
The logic of assets is very clear, but the content attribute of meme itself has been overlooked.
Currently, the various trading bots that rely on the trading attributes have given these high-risk assets a good distribution, and users can easily make speculative decisions based on the data behind the asset attributes.
How to distribute the content attribute of meme itself? This distribution is a bit like a lottery, not speculation, and a good content is easy to make users do a $10 or less lottery/tip behavior, the long-tail liquidity needs a new distribution method, how to build this distribution method, we will leave it to the product part to discuss.
Which chain to choose
When you have chosen the track, gained insight into some industry problems, and have some financing ideas, the first step is to choose the chain, as evm and sol are completely different development models, and the development resources each person has are different.
Ideally, I think there are only two chains to choose from, sol and Ethereum mainnet, because only these two chains have enough meme developers and meme liquidity.
This is similar to how short videos were first Musically in the US and Kuaishou in China - only with sufficient infrastructure and population can there be the possibility of a new creator economy, and platforms deployed on other chains currently do not have this condition and need to wait for the meme ecosystem on that chain to take off before they can potentially succeed.
Of course, from a business perspective, if you can get the support of the public chain or directly get investment from that public chain, it is indeed a very profitable choice, as supporting a meme platform has become a must-have for public chains, but from the perspective of long-term product building, the other public chains have an order of magnitude difference from sol/eth in terms of meme population.
How to choose the core product
Traders or Dev?
Many users, including those observing the industry, believe that pvp and high rug/pull are the biggest problems in the current memecoin ecosystem.
Whoever can better protect investors, whoever has the potential to capture a larger market.
This should be the biggest wishful thinking in our entire industry.
The applications that have exploded in the industry, from 2017 to the present, have always been about how to launch tokens more conveniently and build liquidity.
Traders are well aware of what they are trading, they are not here for refunds, but for 10 0x, so the products for traders should not be about how to guarantee principal, but about providing as many targets as possible.
The meme platform should prioritize incentivizing devs, as they create new narratives and targets.
In addition, when you crawl all the on-chain behavior of pump devs, you will find that devs are also the traders with higher trading volume.
Use new bonding curve or new issuance mechanism?
Before pump.fun, how were tokens issued?
Here you can refer to pinksale, all kinds of liquidity locking, vesting, refund, this product has given a very good template, but why did pump.fun come out?
Because it's simple and direct enough, pvp is not a problem, it's a feature.
So when you want to use a new bonding curve or issuance mechanism, the core is still to consider who your users are?
Mechanisms like pk/short/refund/fair launch, etc. are what users like, or what those who want to issue tokens like.
In terms of bonding curve, there is actually a product that has done very well, vv.meme, those who want to research new issuance methods should go and take a look.
As for new issuance methods, it may be possible to add some fair launch models in the pvp process, which we have also been researching recently.
The current reality is that, including ourselves, we have not found a better solution than the current bonding curve, and our future new solutions may only be to provide users with a new option.
How to incentivize in the long run?
Currently, the graduation rate of pump.fun Raydium is around 1%.
After graduating from Raydium, the probability of rug&pull is probably as high as 99%, and the first batch of profit-taking will basically run away, so new incentive means are needed to make the graduated meme have a longer life cycle.
Moonshot's new product last month proved that users have a demand for long-term construction, they have built a new lp reward mechanism, where the meme's dex transaction fee will be distributed to holders, which is a very good attempt.
This is also part of what we are building in our product, in addition to the transaction fee incentive, how the token should be incentivized, how the sharing relationship should be built and incentivized, are all things we are building.
Of course, just like building a distribution mechanism, both on-chain and off-chain, we need to find out who is the most worthy of incentivization.
Conception of the Distribution Mechanism
As mentioned earlier, memes have a dual nature of content and assets, how should the content be distributed?
Here we have already seen that we.rich has made some preliminary attempts, with basic tags for each meme and also using a simple recommendation algorithm.
However, it is regrettable that due to the limited liquidity of the base and the number of devs, there is not enough data accumulation to build a complete distribution mechanism.
In fact, this should be the thing that pump should build, they should not compete with trading bots like pepeboost for the distribution of trading assets, but rather consider how to distribute the content behind the memes
The current launch volume of 10,000 memes per day and the attributes behind user wallets are actually sufficient to try new distribution mechanisms.
A new opportunity may also lie here, to build a nested pump to construct a new meme discovery mechanism, aggregating the long-tail liquidity, which would be of great help to the entire meme creator eco.
Operational Choice: Do the Pool or Do the Creator Ecosystem
In the process of deciding to do pump.fun, one suggestion that has come up is to do the pool.
You need to artificially create some wealth effect when the new platform goes online, so that the early participating users (traders) can stay on the platform in the long run.
For example, a meme platform promoted by a certain public chain had several 10m memes in the first week of launch.
Some products that have tried meme platforms on different layer 2s have also followed this idea, and I've seen a lot of social media materials like this:
"xxx is the pump.fun of the xxx chain, xxx token is the dragon one, you can follow it."
The second set of materials is: "Dragon One has already increased xx times, Dragon Two may be xxx"
Many people have also raised funds for this purpose, in order to better acquire early users.
If you recognize that meme is a creator ecosystem, artificially doing the pool actually harms the community, the devs and traders in the platform, they will only consider one question, whether your project has the support of the official, the opportunities that grow wildly are flattened, since you can't get the support of the official, then go to pump.fun, there may be new opportunities.
Doing the pool is a particularly short-term way to get positive feedback, but in the long run it will fall into the trap of doing the pool, these platforms now have less than 100 new tokens per day, the reason is here, the important thing is not to do the pool, the important thing is to establish a mechanism where wild devs can run out.
This choice also determines the future product direction: by providing more convenient issuance and community liquidity building tools, to build a new meme distribution platform.
Finally, whether it's in the web3 or web2 track, "understanding a lot of principles but still can't live a good life is the norm", if you are interested in this track, or want to experience the internal test product, welcome to find me through the following ways:
Twitter: https://x.com/0x meme 4 fun
TG: t.me/Joememe4fun
