Original author: Joel Khalili
Original translation: Luffy, Foresight News
It was the early morning of January 18, two days before Donald Trump returned to the White House. Tom had just collapsed into bed when his phone lit up with a message from an old friend: “Did you see? Trump just launched his own cryptocurrency.”
Tom jumped up and sat at his desk, opened his laptop, and turned on two more monitors. It didnt feel real, he said. I was trying to figure out what was going on.
Tom is the head of Raydium, a decentralized cryptocurrency exchange registered in the British Virgin Islands that allows investors to trade cryptocurrencies without intermediaries. Like other employees of Raydium, Tom keeps his full name and whereabouts secret for privacy and regulatory reasons.
Raydium is one of many crypto service providers that have profited greatly from the recent Memecoin craze. As an important part of the Solana network’s trading system, exchanges like Raydium have experienced rapid growth in the past year, and that was before the Trump Memecoin appeared.
In 2024, fueled by the Memecoin craze, Raydium processed the highest volume of trading activity ever. Tom quickly realized that the arrival of Trump Memecoin was an opportunity for Raydium, as Raydium would take a small fee from each transaction.
After Tom verified that Trump Memecoin (TRUMP) was real and not an elaborate scam as some had speculated, he rushed to ensure that Raydiums servers could withstand the coming wave of transactions. (The platform was paralyzed during another Memecoin trading frenzy in late 2023.) Then Tom set about making sure there was enough of the new coin on Raydium for people to trade freely: He monitored the amount of Trump Memecoin that people were voluntarily listing (a practice that allows the maker to earn a portion of the transaction fees) and, when necessary, bought it himself elsewhere to meet the demand on the platform.
Around 5am, Tom lay back down on his bed exhausted. In his haste, he forgot to buy himself some TRUMP.
While Tom slept, trades poured in. The next day, January 19, $16 billion worth of trades took place on Raydium, more than in all of 2023. The trading chart looked “like a hockey stick,” Tom said.
Although tens of billions of dollars changed hands in the frenzy of trading triggered by Trump Memecoin, only a tiny minority of traders made a profit. The vast majority either lost money or made almost nothing.
Value has steadily flowed to the Trump-affiliated companies that manage the cryptocurrency and to crypto service providers including Raydium, which together make Memecoin trading possible. Other components of the “Memecoin Industrial Complex,” as one hedge fund manager once described it, 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 aggregate price data, and more. They all stand to benefit from increased trading activity.
“If you dig deeper, there are a lot of moving parts in the background 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 first began to take shape, Solana was a relatively deserted place. Few people were using the network, and services built on it were barely hanging on. Aside from financial speculation, few applications were built on Solana. “There were a lot of jokes about how developing on Solana was as hard as chewing glass,” Tom said. “It was really hard.”
Memecoin has previously been criticized for being informal and therefore potentially harmful to the crypto industrys efforts to establish legitimacy. Trump Memecoin has been widely criticized as a money-making move. However, the emergence of cryptocurrencies like Trump Memecoin could bring important indirect benefits to the broader crypto network, creating a flywheel effect where the arrival of Memecoin investors attracts developers eager to build other applications for them. In theory, once people are equipped with a Solana wallet, they are more likely to use a variety of Solana-based applications, resulting in a continued increase in network activity.
“A lot of application development teams are going to target these new users,” Arjun said. “Memecoin is an example of something that can run on this kind of infrastructure.”
Some experts say the launch of Trump Memecoin is also significant for the U.S. government’s attitude toward cryptocurrencies. The industry has long complained about the lack of any clear rules governing the issuance of new coins in the United States; given that Trump Memecoin has the support of the president, its launch could be interpreted as a tacit approval.
“This is going to be a ruling that trickles down to all the different institutions: The U.S. is embracing crypto,” said Demelza Hays, digital asset portfolio manager at investment firm Zeltner Co and chief economist at cryptocurrency industry publication CoinTelegraph. “We’re going to see more celebrity memecoins.”
As with the launch of Trump Memecoin, exchanges are the primary profiteers in the Solana Memecoin supply chain, not traders.
“Trading Trump Memecoin is like betting on roulette, while betting on Solana itself is like betting on the entire casino,” Hays said. “When the volume increases, we will definitely see exchanges perform very well.”
While Raydium will likely profit from the Memecoin craze and any potential flywheel effect from the U.S.’s embrace of cryptocurrency, Tom is ambivalent about Trump Memecoin.
“Raydium’s business is to facilitate trading volume. We try to be neutral about the tokens on our platform,” he said. “The fact that the most powerful person in the world chose Solana to launch their Memecoin, for whatever reason, speaks volumes about Solana’s current status.”
But for an industry that has long struggled to shake off a bad reputation, the temporary excitement surrounding Trump’s Memecoin launch may not make up for the negative attention the cryptocurrency has attracted and the losses suffered by ordinary investors, Tom said.
“In the five years that I’ve been in this industry, I’ve been trying to change the default perception that there’s a lot of fraud and malicious behavior in crypto,” Tom said. “I care deeply about that reputation.”
Two days after Trump Memecoin began trading, First Lady Melania Trump launched her own Memecoin (MELANIA). Critics expressed similar concerns about conflicts of interest.
The White House did not respond to a request for comment. A request to the email listed on Melanias Memecoin website was also not returned.
It was exciting the day Trump launched, but now Tom is feeling a little depressed. “I feel a lot worse than I did yesterday,” he said. “I’m definitely not buying any MELANIA.”
