Raydium head: I was excited by the launch of Trump's Memecoin, but I was bored immediately

Author: Joel Khalili

Compiled by: Luffy, Foresight News

In the early morning of January 18, two days before Donald Trump returns to the White House. As soon as Tom collapsed on the bed, his phone lit up and received a message from an old friend: "Did you see it? Trump has just launched his own cryptocurrency."

Tom jumped up, sat at his desk, turned on his laptop, and turned on two more monitors. "It doesn't feel like it's true," he said. "I tried to figure out what was going on."

Tom is the head of Raydium, a decentralized cryptocurrency exchange registered in the British Virgin Islands where investors can trade cryptocurrencies without intermediaries. Like other Raydium employees, Tom keeps his full name and whereabouts confidential for privacy and regulatory reasons.

Raydium is one of many crypto service providers that have made a lot of money from the recent Memecoin boom. As an important part of Solana’s online trading system, exchanges like Raydium have experienced rapid growth over the past year, before Trump’s Memecoin appeared.

In 2024, Raydium handled the highest volume of trading activity ever, driven by the Memecoin boom. Tom soon realized that Trump’s Memecoin’s arrival was an opportunity for Raydium, as Raydium would draw a small portion of the fee from each transaction.

After Tom verified that Trump’s Memecoin (TRUMP) was real, not a well-planned scam as some people speculated, he hurried to make sure that Raydium’s servers could withstand the upcoming wave of transactions. (The platform was paralyzed in another Memecoin trading frenzy at the end of 2023.) Then Tom set out to make sure there is enough of this new currency on Raydium for people to trade freely: He monitors the number of Trump Memecoin people voluntarily hang (This practice allows the pending order to earn a portion of the transaction fee) and purchase it from other places themselves if necessary to meet the needs of the platform.

At about 5 a.m., Tom lay tiredly back on the bed. In the midst of the rush, he forgot to buy himself some TRUMP.

When Tom sleeps, a lot of transactions pour in. The next day, January 19, a $16 billion transaction occurred on Raydium, which is more than the full year of 2023 . The trading chart looks "like a hockey stick," Tom said.

Although tens of billions of dollars have changed hands in the crazy deals triggered by Trump Memecoin, only a very small number of traders have made profits. Most people either lose money or make almost no profit or lose money.

Value flows steadily to Trump affiliates that manage the cryptocurrency and crypto service providers including Raydium, which jointly makes Memecoin transactions possible. As a hedge fund manager once described, other components of the “Memecoin Industry Complex” include the Solana network, companies that provide wallet software for storing cryptocurrencies, liquidity providers that ensure cryptocurrencies can be traded at any time, Entities that summarize price data, etc. They all benefit from the increase in trading activity.

"If you dig deeper, you'll find that there are a lot of running components in the backend that the public doesn't understand," said Anurag Arjun, co-founder of cryptocurrency infrastructure startup Avail and crypto network Polygon.

Until the end of 2023, when the Memecoin craze began to emerge, Solana was still a relatively deserted place. Almost no one uses this network, and the services built on it can only be barely maintained. Apart from financial speculation, there are few applications built on Solana. "There are a lot of jokes about Solana development being as hard as chewing glass," Tom said, "It's really hard."

Memecoin has been criticized for being irregular before, so it may pose a hazard to efforts to establish legitimacy in the crypto industry. Trump Memecoin has been widely criticized as a "causing money." However, the emergence of cryptocurrencies like Trump Memecoin may bring important indirect benefits to the wider crypto network, creating a flywheel effect that the arrival of Memecoin investors will attract developers to rush to build other things for them. app. In theory, once people have Solana wallets, they are more likely to use a variety of Solana-based applications, thus continually increasing network activity.

“A lot of application development teams will target these new users,” Arjun said. “Memecoin is an example of how it can run on this infrastructure.”

Some experts say that the launch of Trump’s Memecoin is also of great significance to the U.S. government’s attitude towards cryptocurrencies. The industry has long complained about the lack of any clear rules governing the issuance of new currency; given Trump Memecoin's presidential support, its launch could be interpreted as a tacit consent.

"This will form a ruling that gradually affects all different institutions: the United States is accepting cryptocurrencies," said Demelza Hays, digital asset portfolio manager at investment firm Zeltner & Co and chief economist at cryptocurrency industry publication CoinTelegraph. "We will see more celebrities Memecoin."

Like Trump’s Memecoin launch, the exchange is the main profiter in the Solana Memecoin supply chain, not traders.

“Trading Trump Memecoin is like betting on roulette, and betting on Solana itself is like betting on the entire casino,” Hays, “When the volume increases, we will definitely see the exchange performing very well. ."

While Raydium may profit from the Memecoin boom and any potential flywheel effect arising from the U.S. admission of cryptocurrencies, Tom is ambivalent about Trump’s Memecoin.

"Raydium's business is to promote transaction volume. We try to be neutral with tokens on the platform," he said. "The most powerful people in the world choose Solana to launch their Memecoin, which is fully utilized for whatever excuses it is for. It shows Solana's current status."

But Tom said that for an industry that has long struggled to get rid of its bad reputation, the whim excitement brought by the Trump Memecoin launch may not compensate for the negative attention this cryptocurrency attracts and the losses suffered by average investors .

“For five years I’ve been in this industry, I’ve been trying to change that default idea: there’s a lot of fraud and malicious behavior in the crypto space,” Tom said. “I care a lot about that reputation.”

Two days after Trump Memecoin started trading, First Lady Melania Trump launched her own Memecoin (MELANIA). Critics have expressed similar concerns, believing that there is a conflict of interest.

The White House did not respond to a request for comment. Requests sent to the emails listed on Melania Memecoin's website were also not responded.

The day when TRUMP was launched was exciting, but now Tom is feeling a little frustrated. "I think it's much worse than yesterday," he said. "I'm sure I won't buy any MELANIA."