Can Meteora kill Pump.fun with its stealth token launch?

As someone who has been around the crypto world for quite some time now, I find the M3M3 launch by Meteora to be an intriguing mix of excitement and skepticism. While I appreciate the innovative idea of allowing token holders to earn rewards without selling their assets, the stealth launch raises a few eyebrows, especially when it comes to transparency and fairness in distribution.

Meteora unveiled a novel initiative called M3M3 (pronounced as “meme”), which aims to revolutionize how meme-based cryptocurrencies function by offering rewards through staking for investors. Yet, there’s apprehension among some experts regarding its operational structure.

The system made it possible to introduce the M3M3 token as a trial for this idea, which soon attracted attention within the cryptocurrency market.

Understanding the M3M3 platform  

M3M3 represents Meteora’s endeavor to tackle the issues prevalent in the meme token sector, where most coins struggle to maintain a lasting worth over time.

The data shows that meme coins are struggling, with less than 2% of the 1.2 million new tokens launched last month on pump.fun moving to decentralized exchanges and an even smaller fraction (0.05%) reaching a market capitalization of $1 million. This is largely because of the high frequency of rug pulls in this space.

In the course of this year, findings from my research have revealed that the deployment of meme coins on the Solana platform has been linked to incidents of rug pulls. These events, as reported by crypto.news, resulted in a staggering $26 million loss for investors in March. More recently, the Hawk Tuah token experienced a catastrophic 90% drop shortly after its launch, raising serious allegations of a rug pull. As a researcher, I find these developments deeply concerning and warrant further investigation to protect the interests of cryptocurrency investors.

$HAWK didn’t disappoint

96% of the supply in one cluster

nice 🤡

— Bubblemaps (@bubblemaps) December 4, 2024

In simpler terms, Meteora aims to tackle these concerns by advocating for a Player-vs-Platform (PvP) system in meme coins. This is different from the traditional Player-versus-Player (PvP) setup, where rapid withdrawal of liquidity can often disadvantage coin holders.

According to the recent announcement, the new Proof of Stake (PoS) model is being introduced in the PPP system. In simpler terms, this PoS method motivates token owners to keep their tokens locked in, thereby decreasing the urge to sell and promoting long-term security instead.

How the M3M3 staking model works

The M3M3 system incentivizes staking by presenting rewards derived from locked liquidity swap fees. These fees are distributed among the top stakers in the form of Solana (SOL) tokens, which can be claimed immediately, and meme coin rewards that are automatically restaked. 

The model might lead to an upward spiral: with more individuals investing, the level of competition rises, prompting them to buy tokens and boost liquidity. This increased liquidity then leads to more incentives being given out.

Withdrawing tokens after unstaking has certain requirements; you’ll need to wait for a specified timeframe before making a withdrawal. This system aims to deter short-term trading and encourages long-term engagement instead.

A saturated market

As M3M3 steps into the bustling market of token launch platforms, it finds itself competing with established players like Pump.fun, SunPump, Snek.fun, and more recently, Springboard by PancakeSwap, which has been introduced on the BNB Chain.

Each competitor has established a unique role by assisting in the creation and boosting of meme coins, as well as generating liquidity. For example, Pump.fun specializes in launching tokens fueled by hype, while SunPump utilizes on-chain buyback and burn strategies. On the other hand, Springboard offers free token launches to its users.

Instead of M3M3’s introduction of staking rewards potentially making it stand out, it could be framed as addressing the challenge of value preservation in a unique way. In contrast, M3M3 employs a staking strategy reminiscent of the “(3,3)” model to foster a long-term, self-sustaining environment.

Possible strengths and drawbacks

One benefit of the M3M3 model is that it encourages token owners to lock up their tokens instead of selling them, thereby minimizing market fluctuations.

It allegedly generates a consistent income flow via fee rewards, and it’s said that this continues even during market declines according to their official site. Moreover, its customizability is an appealing feature for launchpads looking for staking options for their upcoming projects.

On the other hand, the platform does face some hurdles. If rewards offered become inadequate to entice participants, its reliance on staking to maintain demand might weaken. Additionally, since only major stakers gain substantial benefits, this setup could deter smaller investors due to high entry barriers.

M3M3 token launch  

In a swift turn of events, Meteora introduced their M3M3 token as an experimental feature on their platform. In just a few hours after its debut, the token experienced an incredible surge, jumping over 9,620 times its initial value. As a result, it now holds a staggering market capitalization of $116 million, according to recent market reports.

Following its successful launch, MEXC, a significant cryptocurrency platform, quickly added the token to their listings.

meteora distributed M3M3 tokens as free gifts to their actively-engaged platform members. Although this move brought about positive results, it generated controversy, as skeptics argued that there might be an element of preferential treatment within the system and raised questions regarding transparency.

Community reactions

The launch of M3M3 has sparked a variety of responses, ranging from praise to strong rebuke among different individuals.

CC2 Ventures praised Meteora’s charitable airdrop approach, granting active users M3M3 tokens. They emphasized that these tokens carried substantial worth due to the token’s impressive surge and reaching an impressive market cap of over $113 million.

Lemon, another pundit on X, praised the staking model, comparing it to game-changing DeFi innovations of the past. Lemon noted the platform’s ability to allow token holders to earn rewards without needing to sell their assets, describing it as a new frontier for meme coins.  

On the other hand, not all individuals were enthusiastic about the launch. One critic voiced displeasure because the launch didn’t leverage Jupiter Exchange’s well-known launchpad, a move that could have increased transparency.

These critics claim that Meteora’s secretive release of their token has raised concerns about trust, as it seems to have provided an unjustified edge to a chosen group.

In the meantime, some critics outright rejected the project, viewing it as excessively hyped and potentially hazardous. A spectator pointed out the surprising internal dynamics behind the project’s launch, advising potential investors to be wary of investing their Solana tokens in what they considered a questionable venture.

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2024-12-06 10:09