Wired: The Unknown Big Winner in the Trump Memecoin Craze
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Wired: The Unknown Big Winner in the Trump Memecoin Craze
Gamblers may win or lose, but the casino always wins.
Navigating Web3 tides with focused insightsBy: Joel Khalili
Translation: Luffy, Foresight News
In the early hours of January 18, two days before Donald Trump's return to the White House. Tom had just collapsed onto his bed when his phone lit up with a message from an old friend: "Did you see it? Trump just launched his own cryptocurrency."
Tom sprang up and sat at his desk, turning on his laptop and firing up two external monitors. "It didn't feel real," he said. "I was trying hard to make sense of what was happening."
Tom is the head of Raydium, a decentralized cryptocurrency exchange registered in the British Virgin Islands where investors can trade digital assets without intermediaries. Like other Raydium employees, Tom keeps his full name and whereabouts private for privacy and regulatory reasons.
Raydium is one of many crypto service providers that have greatly benefited from the recent surge in Memecoin activity. As a key component of the Solana network’s trading infrastructure, exchanges like Raydium have seen explosive growth over the past year—even before the emergence of Trump-related Memecoins.
In 2024, driven by the Memecoin frenzy, Raydium processed its highest-ever volume of trading activity. Tom quickly realized that the arrival of the Trump Memecoin represented a major opportunity for Raydium, as the platform earns a small fee from every transaction.
After verifying that the Trump Memecoin (TRUMP) was legitimate and not an elaborate scam as some speculated, Tom rushed to ensure Raydium’s servers could handle the incoming wave of trades. (The platform had previously crashed during another Memecoin trading surge at the end of 2023.) Then, he worked to ensure sufficient supply of the new coin was available for free trading on Raydium: he monitored how many TRUMP tokens users voluntarily listed (a practice that allows them to earn a portion of trading fees), and when necessary, purchased additional tokens elsewhere to meet demand.
Around 5 a.m., Tom wearily collapsed back into bed. In the chaos, he forgot to buy any TRUMP for himself.
While Tom slept, trading flooded in. The next day, January 19, Raydium recorded $16 billion in trading volume—more than the entire year of 2023. "The trading chart looked like a hockey stick," Tom said.
Despite tens of billions of dollars changing hands during the Trump Memecoin trading frenzy, only a tiny fraction of traders profited. The vast majority either lost money or broke even.
Value flowed steadily to Trump-affiliated companies managing the cryptocurrency, as well as to crypto service providers like Raydium that made the trading possible. As one hedge fund manager described it, the broader “Memecoin industrial complex” also includes the Solana network, companies providing wallet software for storing cryptocurrencies, liquidity providers ensuring coins remain tradable, and entities aggregating price data—all of which benefit from increased trading activity.
"If you break it down, there are many moving parts behind the scenes that most people don’t understand," said Anurag Arjun, co-founder of crypto infrastructure startup Avail and the Polygon network.
As recently as late 2023, Solana was a relatively quiet place. The network saw little usage, and services built on it barely survived. Beyond financial speculation, few applications existed on Solana. "There were a lot of jokes about building on Solana being like chewing glass," Tom said. "It really was hard."
Memecoins have long been criticized as unregulated and potentially damaging to the crypto industry’s efforts to gain legitimacy. The Trump Memecoin has been widely dismissed as a "cash grab." Yet the emergence of such cryptocurrencies may bring significant indirect benefits to broader crypto networks, creating a flywheel effect—where the influx of Memecoin investors attracts developers eager to build other applications for them. In theory, once people have Solana wallets, they’re more likely to use various Solana-based apps, driving sustained network activity.
"Many application development teams will target these new users," Arjun said. "Memecoins are just one example of what can run on this infrastructure."
Experts say the launch of the Trump Memecoin also carries significance for U.S. attitudes toward cryptocurrency. The industry has long complained about the lack of clear rules governing new token launches in the United States; given the presidential backing behind Trump’s coin, its release could be interpreted as tacit approval.
"This creates a kind of precedent that will gradually influence all different agencies: the U.S. is embracing crypto," said Demelza Hays, digital asset portfolio manager at investment firm Zeltner & Co. and chief economist at crypto publication CoinTelegraph. "We’ll see more celebrity Memecoins."
Just like the launch of the Trump Memecoin, exchanges are the primary beneficiaries within the Solana Memecoin supply chain—not the traders.
"Trading the Trump Memecoin is like placing a bet at roulette, while betting on Solana itself is like betting on the entire casino," Hays said. "When trading volume increases, we’ll definitely see exchanges perform very well."
While Raydium may benefit from both the Memecoin boom and any potential flywheel effect stemming from greater U.S. crypto adoption, Tom feels conflicted about the Trump Memecoin.
"Raydium’s business is facilitating trading volume. We try to remain neutral about the tokens on our platform," he said. "The fact that one of the most powerful people in the world chose Solana to launch their Memecoin, regardless of the pretext, speaks volumes about Solana’s current standing."
But Tom added, for an industry that has long struggled to shed a negative reputation, the fleeting excitement brought by the Trump Memecoin launch may not outweigh the negative attention it attracts or the losses suffered by ordinary investors.
"In my five years in this industry, I’ve consistently tried to change the default assumption that crypto is rife with fraud and bad actors," Tom said. "I care deeply about this reputation."
Two days after TRUMP began trading, First Lady Melania Trump launched her own Memecoin (MELANIA). Critics raised similar concerns about potential conflicts of interest.
The White House did not respond to requests for comment. Emails sent to the address listed on the Melania Memecoin website went unanswered.
The day TRUMP launched was thrilling, but now Tom feels somewhat disillusioned. "I feel much worse than yesterday," he said. "I definitely won’t be buying any MELANIA."
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