This episode unpacks the evolving meme coin landscape with Pump Swap's launch, analyzes Tron's surprising fee dominance, and dissects the critical implications of the new US stablecoin bill for the future of digital dollars.
Pump.fun Launches Pump Swap: Data Insights
- The conversation kicks off with the significant launch of Pump Swap, the native Automated Market Maker (AMM) by Pump.fun, the dominant Solana meme coin launchpad. An AMM is a type of decentralized exchange (DEX) protocol that relies on mathematical formulas to price assets, allowing digital assets to be traded automatically using liquidity pools instead of a traditional order book. Previously, tokens reaching a certain threshold on Pump.fun's bonding curve—a smart contract mechanism that issues tokens according to a price curve—graduated to the Radium AMM. Dan Smith from Blockworks Research highlights that Pump Swap internalizes trading volume previously lost to Radium. Initial data from the Blockworks Research dashboard shows strong volume on Pump Swap, indicating successful capture of this activity, even as overall bonding curve volume trended lower post-market highs earlier in the year. Dan notes, "Volume has been strong... we even seen this huge new volume vertical get created... with the launch of the amm." Despite this volume, the AMM fee revenue hasn't drastically increased Pump.fun's overall earnings yet, though its potential remains significant given the value flowing through the system.
- Key Stat: The total market cap of tokens launched via Pump.fun surged from ~$1M last summer to a peak near $12B, settling around $3-4B currently, serving as a key sentiment barometer for the Solana meme coin space.
- Data Caveat: Dan cautions listeners about potential inaccuracies in other dashboards due to mispricing volume conversions to USD, emphasizing the importance of verifying data sources.
- Investor Insight: Pump.fun's move to launch its own AMM (Pump Swap) represents a significant platform verticalization strategy, aiming to capture more value from the meme coin lifecycle. Investors should monitor Pump Swap's volume and fee generation relative to the original bonding curve activity and its impact on competitors like Radium.
Pump Swap's Role: Verticalization vs. Innovation
- Jack Cuen questions whether Pump Swap offers more than just a replacement for Radium's previous role, probing if it could evolve into a broader Decentralized Exchange (DEX)—a peer-to-peer marketplace where cryptocurrency traders make transactions directly without handing over management of their assets to an intermediary. Discussion points included the potential for bridging non-Solana assets to tap into the meme coin craze. However, Dan Smith, referencing data analysis by ZeroxSharples at Blockworks Research, points out minimal demand for bridged assets like Scroll, Aptos, and Worldcoin on Pump Swap, with volumes under $150,000 combined recently. This suggests Pump Swap currently functions primarily to serve Pump.fun's existing meme coin ecosystem rather than attracting broader DEX activity.
- Key Stat: Bridged tokens like Aptos and Scroll saw negligible volume ($45k and $25k respectively), indicating low demand outside the core Pump.fun meme coin user base.
- Strategic Implication: Pump Swap appears to be a successful vertical integration play for Pump.fun, consolidating the meme coin launch and trading experience. For now, its utility seems confined to this niche, lacking evidence of broader DEX adoption or innovation beyond capturing post-bonding curve meme coin trading.
Meme Coin User Behavior: Pump.fun as Backend?
- The discussion shifts to how users interact with Pump.fun, referencing Ryan Connor's perspective that Pump.fun often acts as backend infrastructure rather than a primary user-facing application. Many users access Pump.fun-launched tokens via aggregators or specialized front-ends like Photon, Bullex, or the newer Axiom platform. Dan confirms this with data showing a significant portion (peaking around 70% historically, now around 30% for bonding curve volume) originates from non-Pump.fun User Interfaces (UIs). Axiom, noted for its potential points program and Y Combinator participation (a prestigious startup accelerator), has recently surpassed Photon and Bullex in volume, though this activity might be inflated by airdrop farming incentives.
- Key Stat: Around 30% of Pump.fun bonding curve volume currently comes from external UIs/aggregators like Bullex, Photon, and Axiom.
- Investor Insight: The rise of aggregators and specialized front-ends built on Pump.fun highlights the platform's role as foundational infrastructure. Investors should track the market share of these front-ends (like Axiom) as they indicate evolving user preferences and potential new distribution channels, while being mindful of incentive-driven volume.
Zora: A New Meme Coin Interface?
- Dan introduces Zora, an app presenting a novel interface for meme coin creation and trading, potentially representing the next evolution of "the game." Zora uses an Instagram-like UI where each post functions as a meme coin launched with a fixed supply on a bonding curve mechanism (similar to Pump.fun but using ETH on Base currently). Users can "like" posts, which translates to instantly buying the associated coin using an in-app currency ("Sparks"). Dan describes it as sitting between the pure social experience of Instagram and the pure monetization focus of Pump.fun. He notes the challenge lies in overcoming the friction of needing currency to interact (liking posts), unlike traditional social media. Dan states, "It looks and feels like a social app but it has this like monetization element around meme coins."
- Strategic Consideration: Zora represents an experiment in blending social media mechanics with crypto monetization. Researchers should observe its user adoption patterns and how it addresses the inherent friction of requiring capital for basic social interactions, which could inform future social-fi designs. The potential for a token airdrop could drive initial adoption but also risks attracting spam.
The "Meme Coin Game": Is it Over?
- Jack raises the recent narrative questioning if the meme coin meta, particularly on Pump.fun, is declining. Dan counters this, citing data showing Pump.fun's combined volume (bonding curve + AMM) is near all-time highs, making it objectively inaccurate to declare it "dead." However, Jack suggests Pump.fun's own actions, like launching Pump Swap and co-founder Allen talking about "Pump.fun Season 2" with creator revenue sharing, signal a "tacit acknowledgement that the meme coin game is not going to look the same that it historically has." This implies an expected evolution beyond the simple daily runner and alpha group dynamics that characterized the recent cycle.
- Market Trend: While raw volume suggests meme coin activity persists, platform strategies are evolving. Investors should watch for shifts in mechanics (like creator share) and user behavior, indicating maturation or transformation of the meme coin market rather than its demise.
Tron Overtakes Solana: Analyzing On-Chain Activity
- The conversation highlights Tron temporarily surpassing Solana in network fees ("real economic value" paid for blockspace). Dan Smith provides analysis, explaining that Tron's activity remains dominated by USDT (Tether stablecoin) transfers, primarily between centralized exchanges (CEXes). He points out the prevalence of spam transactions utilizing Tron's unique staking mechanism, where staking TRX grants free transaction credits, potentially inflating activity metrics like active addresses. Dan contrasts Tron's fee structure (high network fees, ~12M, but very low application revenue, ~$150k) with chains like Solana, Ethereum, and Base, where application revenue significantly contributes to or exceeds network fees. This disparity suggests Tron's activity is less driven by diverse on-chain applications compared to other leading chains.
- Key Insight: Tron's high network fees are largely disconnected from on-chain application usage, primarily reflecting USDT CEX flows and potentially artificial activity. Dan notes, "you look at Tron very very clear outlier and you see about 12 million in rev and about 150 Grand in application Revenue."
- Research Point: The East/West divide in crypto usage is highlighted, with anecdotal evidence of Tron's utility for peer-to-peer and cross-border transfers in Asia, a blind spot Dan acknowledges. Similarly, significant Jupiter (Solana DEX aggregator) volume flows through lesser-known, potentially Eastern-based DEXes, underscoring the need for a global perspective in analysis.
Stablecoin Bill Analysis: The Ban on Yield-Bearing Stables
- The hosts discuss the recently released text of a US stablecoin bill, focusing on a provision banning onshore stablecoins from natively passing yield to holders. Jack suggests beneficiaries could be existing non-yield-bearing issuers like Circle (USDC) and Tether (USDT), and potentially DeFi protocols where users might deposit stablecoins to earn yield they can't get natively. However, this relies on DeFi improving its user experience, exemplified by integrations like Coinbase leveraging Morpho (a DeFi lending protocol) to offer yield access seamlessly. Dan agrees this ban likely stems from regulatory concerns about yield-bearing stables potentially being classified as securities rather than payment instruments. The discussion touches on the narrative of stablecoins supporting US national interest by increasing demand for US Treasuries (held as reserves), making the yield ban seem counterintuitive to maximizing this benefit onshore.
- Key Development: The proposed US ban on yield-bearing stablecoins could significantly shape the market, favoring existing non-yield models and potentially driving more capital into DeFi lending protocols or offshore yield products if UX improves.
- Related Trend: BlackRock's BUIDL fund (tokenized US Treasury fund) sees significant demand driven by stablecoin issuers like Athena (USDe), highlighting how on-chain yield generation is currently intertwined with stablecoin mechanics. Dan references Sam MacPherson's (MakerDAO/Spark) view of a layered system: a base stablecoin layer and a credit layer (like Spark's sDAI - Savings Dai) that absorbs and distributes yield from various sources (including Real-World Assets - RWAs) back to users.
- Actionable Insight: Investors and researchers must track the progress of this stablecoin legislation closely. A ban on native yield could reshape competitive dynamics, boost specific DeFi protocols, and influence the strategies of stablecoin issuers regarding reserve management and yield generation mechanisms (like MakerDAO's sDAI model).
Conclusion
This episode highlights critical shifts: meme coin platforms are verticalizing (Pump Swap) and experimenting with new interfaces (Zora), while US regulation aims to restrict native stablecoin yield. Investors and researchers must monitor these platform evolutions and regulatory developments to navigate changing market dynamics and identify emerging opportunities in DeFi and stablecoin ecosystems.
