MemeCoin Volume Addendum to 10% LP Stimulus(Draft)

To make Meteora a better home for meme-coin launches, we must improve day 1 volumes for memecoins launching on Meteora.

To do so, I propose stacking two stimulus incentives to drive volume.

  1. Traders who buy memecoins launching on eligible Meteora Dynamic Pools will now earn points towards the 10% LP Stimulus Proposal at a rate of 100 points per $1 of buys.

  2. Create a referral fee program where dapps that drive volume to Meteora Dynamic Pools can take 70% of protocol fee. This would mean adding a protocol fee to eligible memecoin Dynamic Pools. I suggest 50% of LP fees.

This MemeCoin Volume Stimulus Proposal would apply to all Dynamic Pools whose token followed the following criteria:

  • Token mint authority and freeze authority is revoked.
  • At least 20% of token supply is permanently locked in Meteora
  • Paired with SOL

A few considerations for these starting numbers.

  • Given the market we believe aggressive incentives is the best way to quickly discover if this proposal will deliver results.
  • Given most locked memecoin liquidity generates no fee revenue for projects, we think a large protocol fee that is used to drive volume for a token is aligned with the goals of a memecoin project.
  • We think reserving 30% of protocol fee for Meteora will deter wash trading while still leaving the bulk of the incentives for volume referrers
19 Likes

With this proposal, meme creators can now earn 70% of their fees, which is ∞% more in fees than they’re getting now on their locked LP tokens on Raydium. It makes perfect sense to me!

3 Likes

Hi!
Should Meteora incentivize healthy pools, or will they consider any?
I mean - memcoins are very chaotic. Wouldn’t it make sense to add additional checks to count a pool as incentivized. Such as - minimum blocked liquidity in the pool, minimum trading volume, minimum number of unique wallets, min pool lifetime. Would these criteria help to make the incentive program more fair?

We have the 10% LP stimulus and powerful fee earning with our DLMM for any pools on Meteora.

The goal for this proposal is to make Meteora a better place to launch memecoins.

3 Likes

The team striving towards the goal of becoming the top DEX on Solana. I agree with the general direction, and offering more incentives and referral rewards will attract more meme coins to trade, which is a necessary and important step. I am eagerly looking forward to seeing us become number one soon.

The numbers make sense to me as the meme deployer will still be profitable as he is in other dexes.

Questions: If the token is locked with Meteora does the “rugcheckers” out there see that? Otherwise they could say LP not burned thus is dangerous to ape.

Would this be market aggressively? The status quo is raydium now and they have the new program to launch tokens without paying the Market fee of 2.78 sol.

Ty

1 Like

Yes tokens locked on meteora show up in Rugcheck and dexscreener

1 Like

While I’m not a proponent of meme coin hype, I see value in transitioning traders to MET by incentivizing them to experience the platform, with the goal of long-term retention. However, I would currently vote no on this proposal for several reasons.

First, the launch date of the token is unclear. It’s difficult to generate hype around unknowns. The 10% stimulus program, for example, seems to suffer from a lack of awareness partly due to a lack of communication, unclear rules and ux around obtaining and verifying points, which creates confusion and erodes trust. This suggests it may have been launched prematurely which is fine but to avoid compounding this issue, we should refrain from introducing new incentives until the existing ones are stable and clear.

Second, what happened to the DAO? As a long-term MER holder, I recall that proposals like this were meant to be decided by the DAO. It feels like the DAO should be established first, especially if we’re discussing how to distribute the treasury and token launch is within view.

Third, is the team confident in the platform’s readiness? Not just for meme coin traders, but as a fully functioning DEX? If the answer is yes and the team wants to launch a token, a blitzkrieg approach might be best. Currently, it feels like there are competing priorities between platform expansion, token launch, and following hype.

The steps should be:

  1. Ensure the team is satisfied with the platform’s current functionality.
  2. Form the DAO.
  3. Announce the MET launch and TGE within a short period (1-3months).
  4. Clearly outline how to acquire MET.
  5. Roll out the stimulus proposal, meme coin proposal, education proposal, and any other initiatives as deemed necessary by the team or DAO.

TL;DR: The current situation feels a little wishy wasy. I would like to see the team either prioritising functionality and tooling and allowing growth to happen organically, or accelerating growth with a well-coordinated blitzkrieg strategy around the launch of a token and how to get it.

2 Likes

Really appreciate this and agree that we’re long overdue to form the DAO. I don’t think the timing is right for the MET launch, but, we can discuss this in the next community call along with the DAO formation.

3 Likes

Huh, surprised no comments about removing the 2% and shoving it into the existing stimulus plan. Could be just points fatigue. This might also obviate concerns about building out the points tracker more quickly, voiced in the first community call about the memecoin stimulus.

I like the edits to the referral program and the lock requirements. It dramatically reduces my concern about friction to adoption with a nice balance between capital requirements for token launchers and partner-driven volume, which launchers will need to be successful.

In my thinking these changes reduce “friction” loosely defined by ~33%.

Assuming fees are competitive, it seems rational that buyers/traders will integrate Meteora pools given the alternative of zero points rewards (despite pro market makers and traders generally caring very little about points). Trifecta!

I’m thinking of changing the token locked liquidity requirement to be % of liquidity in the pool that is locked versus the token supply.

Locked liquidity pools lead to value leaks as fee revenue is sent to the burn address. Among the top 15 memecoins on Solana, 12 have locked liquidity, representing $190m of capital not earning fees from high volume and high fee tier (25bps) pools.

For example, the Raydium Wif pool has $22.8m burned TVL, accumulating $28.5m in lost swap fees.


Figure 1: WIF Value Leak (Raydium)

Cumulative value leak on Raydium from the top Memecoins is closer to $200m (These estimates only includes trades directly through Raydium, not aggregators).


Figure 2: Cumulative Value Leaks (Raydium)

When aggregator volume is included, the first week value leaks from Wif, Popcat, Slerf, and Boden alone amount to $140m. This revenue is currently being burnt, and represents an opportunity for Meteora.

Figure 3: Cumulative Value Leaks (Raydium + Aggregators)

To mitigate this value leak, we suggest implementing 100% protocol fees for memecoin LPs. This ensures all swap fees are collected by the protocol and not by the burn address. The protocol fees would then be distributed as follows:

  1. 25% to initial liquidity deployers.
  2. 25% to liquidity providers in their pro-rata share of non-locked liquidity.
  3. 25% to referral projects such as PumpFun.
  4. 25% to the Meteora DAO treasury.

Figure 4: Proposed Fee Split

Improvements:

  • No fees are distributed/lost to the locked LP burn address.
  • Liquidity pool deployers have access to fees previously unavailable to them. As the alternative is earning 0%, a 25% share is sufficient to deploy liquidity on Meteora.

For Users:

  • User LPs have increased capital efficiency - Their unlocked Lps are not diluted by burnt liquidity pair, in addition they capture a share of the locked LP rewards.
  • Users are incentivized to add liquidity at launch due to the high ratio of burned/unlocked LPs. For example, at launch, it is standard to have 100% liquidity burned. Assuming $500k Locked LP and $50k in user LPs, user LPs earn 2.5x their normal swap fees through 25% redistribution of the Locked LP fees. This encourages LP provision for memecoins that primarily relied only on the initial burnt LP.

For Protocols:

  • A 25% referral amount will incentivize protocols to use Meteora’s infrastructure. For example, PumpFun is dominating memecoin trading, with the protocol creating 855k meme tokens. Once these pumpfunb tokens reach a $69k market cap (through Pumpfuns internal bonding price discovery mechanism), the LP is burnt and deposited on Raydium.

    With the current proposal, if PumpFun chooses Meteora instead of Raydium to launch their pools on, they would be entitled to 25% of all future swaps.


Regarding the Memecoin Criteria:

“This MemeCoin Volume Stimulus Proposal would apply to all dynamic pools whose token follows the following criteria:

  • Token mint authority and freeze authority are revoked.
  • At least 20% of the token supply is permanently locked in Meteora.
  • Paired with SOL.”

We agree that using percentage of locked Liquidity Pair is a better metric than percentage of circulating supply, but this should be kept as flexible and permissionless as possible. Another factor to identify memecoin LPs is the fee tier, as the majority of memecoin pools use 0.25%.

It is important to ensure that locked liquidity on Meteora is highlighted as burned on platforms like Dexscreener and telegram bots.

Additionally, we strongly believe the 2% memecoin stimulus should be a separate allocation and be done in addition to the 10% LP stimulus, as these are two separate proposals targeting different users (memecoin traders vs. liquidity providers). Additionally, it is important that the DAO maintains integrity on previous decisions to avoid community backlash.


Overall, we are supportive of this proposal. As we understand the complexity of deciding unanimously on specific details such as protocol fees, stimulus amounts, etc — we are also happy to proceed with the proposal in its current state provided the 2% allocation is not taken from the existing 10% LP stimulus.

6 Likes

These data are incredible, thank you Keyrock. Am I correct that we need to track two types of volume here?

  1. All volume that hits locked liquidity pools
  2. Volume to locked pools from referral partners

Your suggestion for 100% fees applies only to #2, but how should we handle unofficial referrers? Perhaps unregistered volume will be irrelevant in size, but it should probably go to the project (at first, then maybe Meteora too if it works).

Making sure I’m not losing track of the numbers here: your suggestion to the OP would move 50% to 100%, correct? Which decreases referrer comp by ten pct. (0.5x0.7=35% versus 1x0.25=25%) overall. And if Meteora gives your suggested 25% of fees away, equally to referrer and project, this increases referrer comp to 37.5% :strong:

On the community call today, Ben suggested 15% fees with a 50/50 split between referrer and project, just as numbers for discussion, but I’m not sure how this modifies the above percentages and we probably just need a clean proposal at this point. Apologies if I’ve injected more confusion.

Again, great stuff, thank you.

3 Likes

I like the proposal, I think it’s important right now for us to initiate the DAO and get that ball rolling. I think if we curate the right group of people in there that will ensure a good future for Meteora, eventually might do similar stuff as the Working Groups on Jup, I could see; 1. a group that keeps building out the Bootcamps and on boarding aspect of Meteora 2. A group that’s focused on the Discord and helping out new folks in there, sort of what the LP army is but we can improve on this for sure.

Just some ideas I have more thoughts about this but getting the DAO of the ground is a priority imo

Thanks, Otto. You’re correct; we need to consider two scenarios:

  1. Referral Volume (e.g., via Photon, Pumpfun)
  2. Organic Volume (e.g., through Jup aggregator)

As previously mentioned, for referred volume, our reccomendation is that fees are split equally (25/25/25/25) among the LP deployer, unlocked LPs, Meteora, and the referral project. For organic volume, the fees would be divided equally (33/33/33) among the LP deployer, unlocked LPs, and Meteora.

To illustrate, if a Memecoin has $10,000,000 in volume and 60% is referred, the breakdown would be:

  • 60% of the volume is split 25/25/25/25
  • 40% of the volume is split 33/33/33

Regarding Ben’s comment, we feel that 15% is low and Meteora can afford to be more aggressive. That said, focusing on the ideal fee breakdown now is missing the forest for the trees. It’s more important to move quickly, get referral programs on board, and launch an MVP version of the memecoin pools. The DAO can then analyze the data and adjust the fee split accordingly.

1 Like

Although proposal makes sense, “inserting it in” the 10% LP incentive is a bad look.
LPs are trying hard to learn strategies how to LP the right way and etc(lets be real, although we are here for fees first, everyone is still thinking about points at some point), that is still the main thing that is needed for Meteora. Diluting their allocation is not a good option.
Memcoin trading is another type of activity and it should be rewarded separately, probably separate 2% would be a great option.

1 Like

I love this. Once launchpads and meme teams get wind of the stimulus + LP perma-lock/burn feature, Meteora should be a no-brainer choice for any token launch on Solana.

It’s not often I see someone making proper usage of “data” in plural form. You deserve a grant of 1,000,000 MET for this. :smiley: