Why Meme Infrastructure Continues to Progress

"Social trading" is becoming increasingly popular in the cryptocurrency market. With FOMO gaining more attention this year, more and more projects in the crypto space are prioritizing the development of social trading as one of their key focuses.

The most profitable trading terminal on-chain, gmgn, now features a "Callout" function. Thousands of on-chain players can share their confident positions in real-time, allowing everyone to hear your voice. One of the most interesting aspects of gmgn's social features is that you can "tip" your opinions, similar to buying a globally visible chat megaphone in a game, complete with effects like those seen when a big spender gifts in a live stream.

This feature is not only the most user-friendly for Chinese players currently on the market. From another perspective, paid opinions are also more persuasive. Compared to following trades or paid subscriptions, this is clearly a clever reverse strategy.

The Launchpad pump.fun is also taking action. According to numerous discussions from X, pump.fun offers KOLs a monthly signing fee of $30,000, along with a one-time signing bonus of $20,000, provided they move all their positions to pump.fun, bind their X account on pump.fun, and declare a unique wallet, ensuring they meet trading volume targets on pump.fun without needing FOMO.

When three out of the ten most profitable projects in the entire cryptocurrency market over the past 30 days are striving towards social trading, this is clearly a trend that cannot be ignored.

meme coins enter the "Distribution Competition Era" ================

The emergence of competition in social trading signifies the further maturation of the meme coin market.

pump.fun and other launchpads have drastically reduced the cost of issuing coins. Anyone can easily issue coins, and no one needs to worry about buying malicious contracts like "PiXiu" that could lead to asset losses.
gmgn and other trading terminals have optimized the speed of trading, multi-chain and multi-wallet operations, and monitoring functions required for on-chain exchanges to the extreme.

From issuing coins to trading, the upstream and downstream of meme coins have been standardized. The fast pace of the meme coin market is not the fault of the cryptocurrency market itself or any individual crypto player; rather, it is the manifestation of what this market should exhibit after its infrastructure has been improved. Just as we cannot say that the development of technology, leading to the emergence of guns and cannons, has made the world more brutal.

As launchpads and trading terminals have covered the vast majority of on-chain players, everyone has begun to compete on "network effects." Many players may not like the current market situation where only KOLs can make a meme coin run, but from another perspective, whether it’s a meme coin or a traditional financial market asset, the rise is simply a matter of more and more people sharing the same idea and buying in together.

During the GME short squeeze, retail investors gathered on Reddit to rally. In the meme coin market we are familiar with, previously, everyone monitored X for signals or claimed CTOs, which is essentially the same principle—an asset fears being unknown and lacking collective strength; good wine fears being deep in the alley.

The competition in the meme coin market, after the infrastructure has been improved, has begun to shift towards reach and distribution channels. Since meme coins are attention-driven cultural assets, compared to previous spot or contract "follow trading," their reach and distribution target not a specific user group focused on a certain trading form within the entire market, but the entire meme player community.

Whoever can master this large active user group will have more possibilities and initiative in future developments. If the final winner of social trading competition is gmgn, they might also try to expand their business map to launchpads and beyond.

meme coins are naturally suited for social trading ==============

The social trading of meme coins is significantly different from the cryptocurrency market itself and even traditional financial markets, such as stock market "follow trading."

On-chain data is transparent, and everyone can see transactions in real-time; the blockchain itself is a globally open, real-time database. However, in traditional stock markets, trading data is private, fragmented, and custodial. Social trading platforms like eToro that can share stock trading in real-time either connect to specific brokers' APIs, where the real-time nature of the data depends on the level of precision provided by the broker's API. If a broker only provides trading data every 24 hours, the real-time nature of the trades from users of that broker is significantly diminished.

Alternatively, I could be the broker; you trade on my platform and share your trades, and I handle your orders, which naturally guarantees the real-time nature of the trades. But this means that the users reached can only be those stockholders using your platform (broker), and the user group you can attract is inherently limited to those who have a need for sharing trades or following trades, unlike meme coins, which can attract people who have never been exposed to them through social effects.

Thus, there are also attempts like SnapTrade in the stock market that aim to create a "cross-broker social layer" to connect users from various brokers for social trading, rather than confining stockholders to a closed social layer. But this brings us back to the previous issue: the APIs of different brokers may not be real-time, and you cannot guarantee consistency in user experience across different brokers.

Additionally, we must consider that meme coins are assets that attract young people and are attention-driven. Although we may feel that there are various understanding barriers after playing on-chain for a long time, such as which themes can become popular and which coins might be rug pulls, for a broader audience of young people who have never encountered meme coins, meme coins in a social trading model might simply mean opening an app every day to see what everyone is trading and buying a little, or buying something they find interesting without needing to understand any industry logic or financial reports.

The TikTok and Instagram content they consume daily makes them very familiar with what is trending; they just need to trade.

No need to open an account, no need to spend time understanding and selecting specific assets, and even a viral opinion shared under a certain meme coin could spawn a new hot asset, just like the absurd posts like "Jia Junpeng, your mom is calling you home for dinner." This is another reason why meme coins are naturally suited for social trading.

However, returning to the core of social trading competition, it is undoubtedly about "people." More influential KOLs can attract more people to pay attention, and attention converts into trading volume and capital. As more KOLs establish their reputation, they will attract more capable individuals to compete. Ultimately, what users abandon is not just a simple trading interface, but an entire complete social network.

meme coin social trading is not the endgame ==============

Earlier, we mentioned the reasons why meme coins are suited for social trading, and another constraint on stock social trading is compliance; stock trading has limitations at the stock level.

If a stock social trading platform wants to simultaneously operate as a "social media + broker + investment advisor + data provider," it will face conflicts of regulatory identities. The U.S. Regulation Best Interest requires brokers to prioritize client interests, which presents potential conflicts with the platform's business logic of guiding users to follow certain KOLs for more commissions.

However, the current trend of tokenizing U.S. stocks may change the above situation. In addition to stocks, there are also bundles of RWA assets and prediction markets, all of which can facilitate social trading in the cryptocurrency market. Especially prediction markets, which have already grown significantly.

It is foreseeable that social trading in the cryptocurrency market will become even more intense. But we must not forget that there is a slow-moving big boss, which is X.

After launching the Smart Cashtag feature in April this year, X has not taken much action. We certainly cannot say that X also wants to create a social trading application like FOMO; that would be underestimating X.

In 2024, eToro revealed that in 2023, posts related to trading and investment topics on the X platform exceeded 1.4 billion. As a social media platform, X inherently possesses a massive scale of financial discussion communities that social trading applications find hard to compete with.

In the cryptocurrency field, it goes without saying that no matter how strong the KOLs' ability to lead trades on trading applications, they cannot compare to a tweet from Musk.

Although X has ideas to combine Smart Cashtag with the interaction of information flow to transform it into trading, this type of social trading is centered around social aspects, with trading as a monetization method, much like how people use payment apps like Alipay to buy funds or use WeChat for payments.

From this perspective, I believe that X's social trading not only does not compete with the social trading in the crypto space but will actually expand the current trend of "asset meme-ification" by converting massive information flows into buy orders, leading to more meme stocks like GME, AMC, and Wendy's, deconstructing the serious facade of traditional speculation.

However, the meme-ification of speculation will not be an irreversible trend; people will always believe in memes after losing money from overheated stock trading and then return to believing in stocks after losing money from overheated meme trading. The information distribution power driving buy orders may be more in the hands of platforms like X.

Everything has just begun.

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