In brief
- •Memecoins are experiencing a resurgence in popularity, especially on Solana, attracting a wave of new users to crypto.
- •According to a Galaxy Research report, most retail traders lose money on these highly volatile tokens.
- •The market is dominated by bots, reducing the average holding time to just a few seconds.
- •Profits generated from memecoin trading mainly benefit technical platforms like Axiom and Pump.fun.
While Cathie Wood announced a carnage in the market, the report published on October 1st by Galaxy Research provided clarification on the current dynamics of memecoins.
Behind the apparent popular euphoria, most retail traders come out losers, while the market is largely dominated by automated players. Here are the key indicators revealed by the investigation :
- •“Most traders lose money in a short-term gambling-type market”, states the report. The instability and speed of trades make any human strategy ineffective against automated tools.
- •The median holding time of a memecoin on Solana is now 100 seconds, compared to 300 seconds a year earlier. This figure illustrates the rise of bots, capable of buying and selling within a few milliseconds.
- •These conditions create a market inaccessible to traditional users, who most often find themselves trapped in a mechanism where speed prevails over analysis.
Far from the naive image of community investment, the memecoin ecosystem functions as a competitive environment dominated by automated technologies. Under these conditions, retail investors are structurally disadvantaged, unable to compete with the speed of execution and privileged information access that bots have.
A Profitable Infrastructure for Platforms
Platforms orchestrate the launch, purchase, and resale of memecoins, capturing most of the generated value. They record the largest profits.
According to Galaxy Research, Axiom, a trading platform active in this sector, generated more than $200 million in revenue with a team of fewer than ten employees. The report specifies “that Axiom reached millions of dollars in monthly revenue by charging fees on memecoin traders.” This model is complemented by tools like BONKbot or Trojan, which monetize access to automatic sniping functions during the launch of new tokens.
One of the most emblematic cases is Pump.fun, a memecoin launchpad on Solana. Launched in early 2024, the platform industrialized the token creation process, hosting nearly 13 million memecoins out of the 32 million existing on Solana.
Last July, Pump.fun raised $500 million in less than 12 minutes during the launch of its own token, PUMP, putting 125 billion tokens on the market. Between August 11 and 17, the platform generated $13.48 million in revenue and recorded a daily volume exceeding one billion dollars.
These figures illustrate the commercial efficiency of a sector that has transformed memecoin creation into a lucrative lead product. This evolution raises questions about the model’s sustainability, as these cryptos have just fallen to their lowest level. In the long term, the concentration of revenues in the hands of technical intermediaries could fuel tensions within the ecosystem or even prompt calls for regulation. Even more, this economic structuring risks amplifying user distrust toward a market perceived as unfair or even manipulated.