I. The Rise of GMGN: A Startup Experiment that Precisely Captured the Pulse of the Times
When the Meme coin craze on the Solana chain swept the crypto world in 2024, GMGN, with its killer features like "Rat Trap Tracking" and "Smart Money Sniper", became the biggest dark horse in the on-chain trading tool sector, with an astonishing daily fee income of $500,000. This project led by a Chinese team made the leap from a marginal tool to an industry infrastructure in just 18 months, but has recently faced the most serious trust crisis since its inception.
1.1 Founding Genes: Grassroots Counterattack and Product Obsession
The story of GMGN began with two atypical crypto entrepreneurs. Co-founder Haze's background is highly dramatic - he did not complete his undergraduate degree, accidentally encountered Bitcoin in 2017, and grew from a customer service representative at a quantitative trading company to an early member of the Pei network exchange, eventually capturing the historic opportunity of on-chain meme coin tools.
This grassroots background has shaped GMGN's underlying logic: to abandon grand narratives and focus on solving the urgent pain points of retail investors "chasing on-chain memes".
The product naming already reveals the team's deep understanding of community culture. "GMGN" is derived from the daily greeting of NFT players "Good Morning, Good Night", combined with the "Slogan" "Degen everyday", precisely penetrating the identity of crypto natives. This strategy of deeply binding tool attributes with community culture has enabled it to quickly establish mind share among similar products.
1.2 Three Key Transformations: Stepping on Every Wind Vane
- Ethereum Pilot Period (2023Q3): The initial version focused on tracking smart money on the ETH chain, but was constrained by Ethereum's high Gas fees and low transaction efficiency, and failed to ignite the market
- Solana Migration (2024Q1): Decisively abandoned emerging chains like Base and Blast, and went all-in on the smoother trading experience of Solana, coinciding with the outbreak of phenomenal Meme coins like BOME and WIF, with daily trading volume exceeding $72 million
- Functional Revolution (2024Q2): The launch of the "Rat Trap Monitoring" feature triggered a qualitative change, using algorithms to mark abnormal holding behavior (such as multi-wallet synchronous operations, regular fund transfers), converting on-chain transparency into a retail weapon, leading to a 600% surge in trading volume
This agile iteration capability stems from a unique user feedback mechanism. GMGN maintains a list of 500 deep users, with the product team maintaining high-frequency communication with them, and new features must be launched within 1 week of priority demand evaluation.
It is this "user demand-driven" development model that has enabled it to break through the competition of products like Pump.fun and Moonshot.
II. Building a Business Empire: Commission Model and Marketing Combination Punch
2.1 Casino Economics: The Lucrative Secret of 1% Commission
GMGN's business model is extremely simple yet highly profitable - a 1% commission on each transaction. In the crazy market where the average daily turnover of Meme coins exceeds 300%, this "high-frequency trading tax" model has shown amazing power:
- Cumulative trading volume exceeded $4 billion
- User base reached 420,000, of which 83% are Solana chain users
- At the peak period (January 19, 2025), the daily commission income reached $2.34 million, exceeding the $1.97 million of Uniswap V3 in the same period
But unlike CEXs, GMGN has not set up a market maker rebate system, with all revenue directly coming from the friction cost of retail trading.
This design forms a self-reinforcing cycle in the bull market: more users → more transactions → higher revenue → more KOL promotion → more users......
2.2 Marketing Undercurrent: The Hidden Cost of the KOL Empire
GMGN's explosion is inseparable from the carefully designed KOL ecosystem. According to an insider, its marketing strategy includes three mechanisms:
- Tiered Signing System: The annual signing fee for top KOLs exceeds $500,000 (such as @0xSun), and mid-level KOLs are around $100,000-$300,000, with the requirement of exclusive agreements prohibiting the promotion of competitors
- Content Co-Creation System: Providing data dashboard templates, encouraging KOLs to create content like "Smart Money Sniper Tutorial" and "Rat Trap Decryption", forming a viral transmission
- On-chain Rebate Experiment: Exploring the distribution of a portion of the commission fees to KOL wallet addresses based on promotion effectiveness, to achieve compliant incentives
This aggressive strategy has had a remarkable short-term effect - the growth of GMGN's Twitter topic volume increased by 1200% in Q4 2024, but has laid two major hidden dangers:
Animoca Brands researcher @hoidya_ said: Other exchanges can use CEX and VC tokens to subsidize earnings, but how can GMGN survive the bear market with pure commission fees?
- KOL costs account for more than 60% of total revenue, far exceeding the industry average (CEXs usually control it within 20%)
- Exclusive agreements are countered by CEXs, with OKX and Binance grabbing KOL resources by integrating DEX functions into their wallets, leading to a wave of contract breaches
III. Storm of Doubts: Data Plunge and Model Questioning
3.1 Revenue Cliff: The Truth Behind the 97% Decline
On March 11, 2025, defillama data showed that GMGN's daily commission income had plummeted from $2.34 million on January 19 to $74,000, a 97% drop. The independent monitoring data of defillama confirmed this trend, with the revenue curve showing a "vertical plunge" characteristic.
Three core causes:
- Disappearance of Market β: The total market cap of Meme coins shrank from the January peak of $120 billion to $38 billion, and the number of active addresses on the chain decreased by 72%
- Product Substitution Crisis: CEX wallets have integrated DEX aggregation functions (such as the Swap module of OKX Wallet), and users have turned to zero-commission alternative solutions
- Regulatory Black Swan: Anti-money laundering investigations on on-chain tools in multiple countries have led to the withdrawal of some institutional users
3.2 Imbalanced Cost Structure: The Backlash of the KOL Ecosystem
The essence of GMGN's crisis is the failure of the "high fixed cost + fluctuating revenue" model. According to estimates, its monthly rigid expenditures include:
- Personnel and Servers: About $600,000 (30-person team + on-chain node maintenance)
- KOL Contracts: $500,000-$600,000 (calculated based on 300 KOLs)
Even if the current daily revenue remains in the $74,000-$120,000 range, the monthly net profit can still reach $1.6 million, but the problem is:
- No signs of a reversal in the downward trend of revenue
- Escalating KOL breach costs (2-5 times the breach penalty)
- Changes in user psychological accounts: "High commission rationality" perception collapse
IV. The Path to Breakthrough: GMGN's Life-and-Death Gamble
Facing the crisis, GMGN's management Haze responded to the community:GMGN is a pure on-chain company, a trading platform, a trading tool, and a data analysis platform, and the team's cash reserves are very healthy...
V. Industry Revelation: The Survival Law of Tool Projects
GMGN's experience reflects the deep-seated dilemma of the on-chain tool track:
- Reflexivity Trap: Excessive reliance on specific asset classes (such as on-chain memes), leading to a strong coupling between products and market sentiment
- Protocol Layer Squeeze:CEXs encroach on the survival space of DEX tools through wallet entry points
But crisis also contains opportunities. As Haze emphasized in the latest statement: "GMGN's cash flow is sufficient to support over 3 years of extreme market conditions, and we are turning the crisis into an opportunity to restructure our business model." The final outcome of this storm may define the evolutionary direction of the next generation of on-chain infrastructure.
