Two days before the inauguration of the 47th President of the United States, the unlikely mastermind behind what would send the crypto market into a frenzy was Donald Trump launching his own memecoin $TRUMP. The ensuing mania was unlike anything we have seen before, with the token skyrocketing to over $70 billion in market capitalisation in just under 48 hours. DWF Ventures dives into the TRUMP phenomenon and its implications for the crypto market.
$TRUMP Token Launch
The launch of the $TRUMP memecoin was announced by Donald Trump himself, and became a liquidity-sucking event, drawing renewed attention back towards the crypto market from the general public. This was evidenced by Google search spikes and mainstream media coverage on this phenomenon. It seemed like everyone and their mothers wanted exposure to the token, marking the start of ripple effects across the crypto ecosystem.
First-Order Effects: Solana Takes Centre Stage
As Solana was the sole chain for transacting $TRUMP in the early stages (before CEX listings), this drove massive inflows and activity across its ecosystem. The surge benefitted Solana DEXs like Jupiter, Meteora, Raydium and memecoin trading platforms like Moonshot, which saw exponential demand.
Looking at the record-breaking numbers:
- Total DEX trading volume on Solana hit over $12 billion on January 18, 2025, surpassing all records held by any other chains (according to DeFiLlama).
- DEX and CEX spot and perpetual trading volume hit all-time highs, rising to 20.3% and 10.5% respectively (as per The Block’s data).
- $SOL hit an all-time high of $293, soaring over 30% on the day.
- Wallet providers like Phantom saw a staggering 8 million requests per second.
- Stablecoin inflows on Solana increased by over $4 billion over the week as compared to usual volumes (Artemis data).
It is also interesting to note that almost half of the wallets which owned $TRUMP were new, suggesting that this event has onboarded a significant number of retail users. Over 80% of wallets hold less than $1,000 worth of $TRUMP, further suggesting that most of them are likely retail that are dabbling their toes in the market.
While these numbers are very positive for Solana and the overall crypto ecosystem, the stress test also exposed some limitations for the blockchain. Solana faced a transaction failure rate of around 40% during the spike in transaction activity, up from the usual threshold of 20%. This meant that most users had to at least attempt a transaction twice for it to go through. Gas fees also spiked to over 0.01 SOL (~$2.5), up by over 2000% from usual fees.
Nonetheless, this has shown the growth of crypto as the ability to handle such load was unfathomable in the past cycle. It also cemented Solana’s position as the most scalable chain suitable for ‘mass adoption’.
Second-Order Effects: What’s Next for Solana, Regulations and Memecoins?
On Solana ETFs and Regulations
Being the ‘president-endorsed’ blockchain, many are speculating that $SOL will be the next cryptocurrency to get an ETF. Even though a leaked page of $SOL futures being launched on CME turned out to be an error, many are still hopeful.
One thing’s for sure: there are more tailwinds than headwinds for the growth of crypto under Trump’s administration.
Trump has expressed his desire to grow the U.S. into a leader in digital assets, starting with the discussions over the strategic $BTC reserve and appointing a working group that would work towards more friendly crypto regulations. Trump-owned World Liberty has also been accumulating several tokens in the past week, with ‘skin in the game’ making people more positive on change actually coming.
Entering the Era of Hypertokenization
Tokenization is one of the core tenets of crypto, and the access to it has become easier over time. With platforms for launching memecoins such as Pump.fun and SunPump offering a ‘one-click’ experience, anyone could try their hand at doing it without much effort.
The success of $TRUMP will definitely not go unnoticed from politicians to celebrities and influencers, as it has proved to be a viable and efficient way of crowdfunding. Rus, the founder of a short-form video hosting service called Vine (currently defunct), launched his own $VINE token shortly after, calling for people to support the return of Vine, and it catapulted to over $300 million in valuation overnight.
Platforms like Clout and Tribe.run that enable hypertokenization have garnered significant attention in the past week, reminiscent of the days when Friend.tech first entered the scene. These platforms go beyond simple tokenization by offering benefits tied to ‘ownership’ of individuals, through token-gated channels, allowing creators to explore what value they can bring to users.
Potential Community and Regulatory Ramifications
Despite being seen as a wealth generation event, data shows that less than 50% of wallets have realized profits on $TRUMP. Furthermore, most of the wealth is held in the hands of top whales, including Trump himself and CIC Digital.
$TRUMP tokens are set to start unlocking on April 18, 2024, with over 4% of tokens (worth about $1.3 billion at the time of writing) hitting the market immediately. Given that only 20% of tokens are liquid at the moment, it is a sizable amount. Coupled with the fact that most are retail users who are likely not aware of the underlying tokenomics, this could result in significant losses for them as the unlocked tokens are dumped.
Hence, there will likely be more regulatory scrutiny surrounding similar token launches and launchpad platforms.
Ending Thoughts
As the dust settles, many would be asking where the market is headed next. Will attention go back towards the AI x Crypto and AI Agents narratives? Or is it in fact shifting towards DeFi and SocialFi?
Crypto is fundamentally a social movement, driven by sentiments and collective belief towards a certain goal. $TRUMP’s success shows the power of collectiveness, and we will see more of this as communities shill their own narratives. The hot ball of money continues to rotate across narratives and such phases are accelerated more than ever. Amid the noise, few projects will emerge and stay relevant across cycles, and this is where the greatest upsides are delivered.
In the months ahead, we likely see more volatility than up only. Nonetheless, the future for crypto remains very positive.
If you are building the next Web3 disruptor, and are searching for a crypto venture capital firm to support you along the way, don’t hesitate to contact DWF Ventures via form on our page.
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