Memecoin Infrastructure - The Real Picks & Shovels' Plays of This Cycle: What You Need to Know
Pump.fun, Photon, & DEX Screener
Memecoin mania is in full swing, inciting even more controversy today due to pump.fun’s livestream feature. Still, memes in their current state are not seeing a broader ‘rising tide lifts all boats’ type rally. We've seen short, sector-wide rallies in the AI sector, before a diverse selection of tokens became available, diluting the effect of inflows. We've seen quick ascensions from tokens like $PNUT and $ACT off of the back of unexpected Binance listings. More recently, we've seen $CHILLGUY usher in a new TikTok meme meta, though not many tokens in this same category have had anywhere near the same success.
This is in part due to the seamless creation process of new tokens. We've even seen situations where KOLs and even exchange listing managers have gotten confused by which specific token was the primary recipient of community attention, a problem made possible by the diminished barrier to launch tokens. Pump.fun has played a massive role in enabling the memecoin meta, allowing even those who potentially aren't even familiar with Blockchain to launch tokens.
Behind pump.fun, there are other memecoin tools that are also absolutely crushing it. It has become abundantly clear that the memecoin trading terminal and tooling providers are the real ‘picks and shovels’ play of this cycle; they just lack liquid tokens with strong performance to highlight their astounding success. In this edition, we'll go over the three biggest players facilitating the ongoing memecoin narrative; pump.fun, Photon, and DEX Screener.
Stay informed, stay alert ⬇
Background on pump.fun
At this point, pump.fun needs no explanation. The protocol came out of nowhere, receiving little to no attention or hype from most of crypto twitter before or shortly after its launch. It would seemingly only catch the attention of more ‘serious’ investors after already setting records and drawing huge revenues. The amount of $SOL the protocol is taking in on a daily basis from platform fees has even become a consideration behind what's driving $SOL price, as the team has demonstrated that they will dump retained $SOL fees at a moments notice.
More recently, pump.fun’s livestream feature has garnered attention, though it might not be of the highest quality. Regardless of the antics that token deployers use to promote their memes, the metrics don't lie; pump.fun is the biggest winner in the current memecoin meta. The team has also shown no hesitation when it comes to cashing out, selling ~ $100M+ worth of $SOL earned from platform fees. Reportedly, Pump.fun is technically the fastest startup to earn $100M in revenues, of any startup ever. Since its launch, pump.fun has earned $252M and counting in fees, with activity picking up recently in both $SOL and USD terms.
Background on DEX Screener
DEX Screener’s role in facilitating memecoin trading also can’t be understated, serving as the defacto means for users to check token prices seeing that most memecoins are not listed on platforms like coingecko or coinmarketcap. As Solana users might have come to expect, DEX Screener comes with its own app as well, easily accessible on mobile. Unlike pump.fun or Photon, DEX Screener; 's profitability isn’t reliant on Solana, though the chain is responsible for the majority of revenues currently (~80%).
DefiLlama quotes all-time fees that DEXScreener has taken in at $43M. This includes the fees that DEX Screener charges for listing; some have criticized the platform for allowing sponsors to place their tokens near the top of search pages, similar to Google ads. Teams also have to pay to add token info to DEX Screener’s token page. DEX Screener also has its own integrated swap, sort of similar to MetaMask or Rabby’s in-wallet swap, which charges a 0.5% fee.
Background on Photon
Photon essentially serves as a trading terminal, providing analysis that is in-depth enough and on par with DEX Screener, paired with integrated trading and swaps. Users can also access token sniping features in addition to swaps and discovery, which are similar to the offerings of the original popular telegram trading bots but with a dedicated website and a smoother UX. The platform has even expanded to include trading on Ethereum mainnet and L2s, but unsurprisingly, Solana remains the main money maker.
Aside from fees, a surprising amount of user activity can be observed on the Photon platform. Solana has long been criticized for the prevalence of bots and linked wallets. This has even led to some attempting to quantify more ‘real’ economic value. On Photon, the average user, of which there are 415K since the platform's inception, has made 185 trades. Average volumes traded per wallet on Photon stand at $48K, significantly higher than the average amount traded across all Solana wallets. This is a remarkable amount, and even if the median is significantly different than the mean, Photon remains one of the most successful crypto protocols in existence when it comes to getting user engagement on a daily basis.
The reality is that most protocols in the DeFi space, especially excluding those in the perps sector, are not capable of having users interact with the platform several times per week or more. The fast-moving nature of memes and the UX of Photon creates a scenario where this is actually viable for users, perhaps not seen at this scale since the likes of the Play-to-Earn Web3 gaming frenzy in 2021.
Beyond the main 3 players in the memecoin space which we have detailed above, which have basically been prerequisites for memecoin trading, there are other teams that have been able to claim a piece of the memecoin pie for themselves. Memecoin trading and the efforts that teams are willing to endure to get an edge trading the tokens can help broader Solana infrastructure providers, including Jito, which introduces its MEV tips as a component to consider for memecoin sniping.
Raydium has also raked in fees this year. Interestingly, the majority of swap volumes are still between majors e.g. $SOL & stablecoins. However, top tokens like $CHILLGUY and $ai16z can be found at the top of the volume charts, in addition to the native $RAY token itself. $RAY has more than tripled in price since last month, a clear favorite to allocate to in order to reap some of the benefits associated with memecoin trading.
Important Links
Become a Premium member to unlock all our research & reports including access to our members-only discord server
Join thousands of sharp crypto investors & traders by becoming a Premium Member & gain an edge in the markets. For just $116.58/month you’ll get:
Premium access to the entire Revelo Intel platform
Members Only Discord server
Market Intel - actionable trade ideas
Industry Intel - important trend & narrative overviews
Project Breakdowns - Deep dive 50+ page protocol-specific reports