The Trump family stirs up the crypto world again as the "First Lady Coin" MELANIA briefly hits a market cap over $1 billion, sparking controversy over multiple token details
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The Trump family stirs up the crypto world again as the "First Lady Coin" MELANIA briefly hits a market cap over $1 billion, sparking controversy over multiple token details
This funding frenzy has severely drained the crypto market.
Navigating Web3 tides with focused insightsAuthor: Nancy, PANews
Following Trump's personal launch of the meme coin TRUMP, which sparked unprecedented excitement both within and beyond the crypto community, his wife Melania has now released her own official token, MELANIA. Fueled by the "First Lady effect" and fear-of-missing-out (FOMO) sentiment from missing out on TRUMP, MELANIA’s market cap briefly surged past $13 billion, causing Solana network congestion and even leading to outages due to a spike in transaction volume. However, this FOMO-driven capital frenzy has severely drained liquidity across the broader crypto market, while multiple aspects of MELANIA's token launch have drawn controversy.
In the early hours of January 20, Melania Trump announced on social media that people could now purchase the meme coin MELANIA. Shortly after, Trump shared the post, further confirming the news and quickly igniting market interest.
TRUMP Drops as Crypto Market Suffers Severe Liquidity Drain
Riding on the wealth effect previously generated by Trump’s TRUMP token, MELANIA rapidly absorbed significant market liquidity within just hours. According to DEX Screener data, MELANIA reached a peak market cap of over $13.09 billion shortly after launch, with cumulative trading volume exceeding $1.36 billion.
As MELANIA drained liquidity from the market, widespread declines followed across the crypto sector, particularly evident in on-chain asset outflows. Even TRUMP was not spared, briefly dropping below $40.
Data from SoSoValue shows broad corrections across crypto sectors: AI Agents dropped 12.08%, PayFi fell 6.75%, DeFi declined 6.94%, and the MEME sector slid 7.53%.
According to Coinglass, total liquidations across the crypto derivatives market exceeded $710 million over the past 12 hours, including $590 million in long positions and $120 million in short positions. The most heavily liquidated assets were Bitcoin, Ethereum, Solana, and TRUMP. GMGN data indicates TRUMP saw a maximum drop of 59.6% today.
Token Website Rushed Just One Day Prior, MELANIA Initial Lockup Only 30 Days
While MELANIA has been heavily hyped in the market, its token creation rationale, unlock mechanisms, and the Trump family's consecutive token launches have sparked speculation and criticism.
On one hand, the deployment timeline for MELANIA appears suspiciously rushed. As disclosed by cygaar, a contributor to Abstract, MELANIA’s official website and domain were both created yesterday (January 19), and the frontend code remains incomplete. In contrast, preparations for the TRUMP token began as early as December 2024.
On the other hand, according to MELANIA’s official website, the token allocation is structured as follows: 35% to team, 20% to treasury, 20% to community, 15% to public sale, and 10% to liquidity. MELANIA differs significantly from TRUMP in terms of unlock mechanics—the team’s portion has an initial lock-up period of only 30 days, whereas TRUMP requires a three-year vesting period for team tokens. Meanwhile, on-chain analyst Yujin pointed out potential discrepancies in MELANIA’s token distribution details. While the official allocation states 35% for the team, calculations based on unlock rules appear to use 30%. Additionally, only the team’s 35% includes unlock rules; the rest are unspecified—suggesting up to 65% of MELANIA could be immediately circulating.
Regarding the Trump family's repeated token launches, Zack Guzmán, founder of crypto media outlet Coinage, analyzed that launching TRUMP and MELANIA before the inauguration may be a strategy to avoid constitutional risks. Under the U.S. Constitution’s Emoluments Clause, the president cannot accept private gains from foreign governments. Trump has already earned approximately $7.2 million through NFT projects, while Melania earned over $330,000 from NFT sales. Launching these tokens before officially taking office may reduce the risk of being accused of violating the Emoluments Clause.
Ryan Selkis, founder of Messari, publicly urged Trump on social media to fire whoever recommended launching the Melania project, citing several concerns: lack of professional competence among the project team, potential for significant financial and reputational damage, and decisions made without proper consideration of Trump’s best interests.
"Meme coins are zero-sum lottery tickets. They don’t create wealth. Every buy order simply matches a sell order. After the initial surge, prices eventually crash, leaving the last buyers with massive losses. If platforms take fees, it becomes a negative-sum game. It’s fine if you want moderate gambling for entertainment. It’s acceptable if you’re a professional trader. But most people should invest in long-term value-preserving assets," advised Balaji Srinivasan, former CTO of Coinbase.
Solana Network Overwhelmed, Facing Massive Stress Test
Of course, this frenzy also subjected the Solana network to a massive stress test. A surge in transaction volume caused severe on-chain congestion. Investors escalated gas fees to prioritize transactions, forcing major exchanges to temporarily suspend withdrawals on the Solana network.
"All our systems are currently under extreme load. The team is working hard to restore normal service as soon as possible," DEX Jupiter announced. Phantom, a Solana wallet, revealed on social media that request volumes had spiked to over 8 million per minute. During efforts to stabilize the platform, transactions may fail upon first attempt.
Buffalu, co-founder of Jito Labs, stated that due to unprecedented load levels, Jito Labs’ block engine API is experiencing severe service degradation. While the Solana network continues to operate and process blocks, transactions submitted via Jito Labs services are affected. Engineering teams have been troubleshooting for hours and will provide updates once full service is restored. According to Tom Wan, strategy analyst at 21.co, daily tip income for Jito validators hit a record high of $23 million—surpassing even the levels seen during TRUMP’s launch.
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