July 2023#Cryptocurrency

Meme-coins: how they are launched and how much profit they bring

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Authors

Ales Kavalevich

Managing Partner, CEO

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2085
3 min

 

Fairly impressed by Pepe's success, we decided to analyze their launch strategy and calculate how much the creators have earned. More so, doing this in Web3 was a breath of fresh air.

Website on WIX, coin on ETH—those are no coincidences. The average ETH transaction size is five times larger than BSC. Ethereum's users are obviously the much wealthier elite. An amusing issuance number came down to 420.690 trillion coins, and the first 5 days after the launch were the most critical ones.

Chronology

14.04: launch. The contract is deployed, and liquidity is added to Uniswap. 93% of all Pepe supply is added to the pool, along with 2 ETH. All LP tokens are burned, and the rest of the issuance is allocated for CEXes. A light shilling, including through the popular TG bot (examples: 1; 2), begins.

By the end of the first day, there are 118 holders, mainly team members with multiple accounts. 

15.04: not a single sale till the 350k cap. Adding 10k followers to Telegram and Twitter and scoring the first retweets from large accounts. The volume and price are being actively fixed: the morning trades come down to $1 million, while the evening ones go over $6 million. This dynamic starts attracting the attention of the degen channels and chats. Pepe is on all the trends on dextools. By the end of the day, there are 658 holders. 

16.04:  active shilling on Twitter and Telegram. There is no copying, everything is purely organic. Here are some examples: 1, 2, 3, 4.

2,763 holders, $254k in the pool, the market capitalization is over $5 million.

17.04: listing on CMC and CoinGecko. First listing on Hotbit. Information spreads across the signal channels. Active shilling: 1, 2.

The key task is to show a chart with impressive numbers.

The next task is to show a rapid change to create FOMO.

9,017 holders. $17 million market cap.

18.04: the team publishes a press release on Yahoo.finance. In the morning, the material is published on Coindesk and other media (1, 2). Pepe is trending on Twitter.

An uncontrollable hype begins.

16,715 holders and $33 million market cap.

19.04: trading volume is over $10 million per day. Listing on 10 more CEXes. 

The YouTube bloggers join the party: (1, 2).

26,608 holders.

06.05 – Pepe’s cap reaches $1 billion. By this point, all traders have collectively earned $160 million on the token. Of those, $150 million were earned by people who bought the token in the first week, and obviously, the creators were a part of the group. Estimated earnings of the team on the project at this point is $30-$100 million, along with the first 3-4 days investments of $300-500k for market making, commissions, and a bit of marketing.

Our takeaways from the launch strategy

1. The narrative, originally designed for the American audience, Make Pepe Great Again.

2. Revamped meme coin economy with no transaction fees, LP token burns, and a people’s coin concept.

3. Creation of a pool with insufficient liquidity.

4. Cheating turnovers and capitalization, using wallets with significant balances. Maintaining the buy/sell level at 4/1.

5. Attracting the first audience through dextools and several large entry points for alpha seekers.

6. Entering Twitter trends without an active performance. The whole product is pure marketing.

7. Refilling liquidity to support the pump for as long as possible without taking anything out of the market.

And most importantly, the project was not the first try of the team, but a result of several attempts.

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