“If you break it down, there are a lot of moving components in the backend that people are not necessarily cognizant of,” says Anurag Arjun, cofounder of crypto infrastructure startup Avail and Polygon, a crypto network built to rapidly process large numbers of transactions.
Until late 2023, when the first inklings of the memecoin frenzy were beginning to show, Solana was a relative ghost town. With barely anyone using the network, the services built atop it had to subsist on scraps. There remain very few Solana-based applications built for purposes other than financial speculation. “There are a lot of jokes about Solana development being like chewing glass,” says Tom. “It can be very hard.”
Memecoins have previously been scorned as unserious and therefore potentially damaging to the crypto industry as it strives for validity. The TRUMP coin in particular has been roundly criticized as a “money grab.” Yet the arrival of coins like TRUMP could have important second-order benefits to crypto networks more broadly, creating a flywheel effect whereby the arrival of memecoin gamblers attracts developers eager to build other applications for them to use. Once people are equipped with a Solana wallet, the theory goes, they are more likely to engage with Solana-based applications of all kinds—whether social platforms, games or music services—leading to a lasting increase in network activity.
“A lot of application teams will be targeting those new users,” says Arjun. “A memecoin is one example of what can run on this infrastructure.”
The TRUMP launch is also significant for what it implies about the US government’s attitude towards crypto, experts say. The industry has long complained about the absence of any explicit rules governing the issuance of new coins in the US; given that it has the president’s imprimatur, the TRUMP launch might be interpreted as tacit permission.
“This is going to create a kind of ruling that will trickle down to all the different agencies: America is embracing crypto,” says Demelza Hays, digital asset portfolio manager at investment firm Zeltner & Co and chief economist at the crypto trade publication CoinTelegraph. “I think we’re going to see [many] celebrity memecoins.”
As with the TRUMP launch, the exchanges and other components of the Solana memecoin supply chain predominantly stand to gain, not the traders.
“Trading the TRUMP memecoin is like betting on roulette. Making a bet on Solana itself is like betting on the whole casino,” says Hays. “When there is higher trading volume, we’re definitely going to see [the exchanges] do very well.”
While Raydium likely stands to profit by any potential flywheel effect created by the memecoin frenzy and embrace of crypto by the US, Tom finds himself conflicted over TRUMP.
“Raydium’s business is to facilitate volume. We try to take a very agnostic approach to the tokens available on the platform,” he says. “And having the most powerful person in the world choose Solana to launch their memecoin, whatever the pretext, is a huge indication of where Solana is right now.”
But for an industry that has long struggled to move past the stains on its reputation, Tom says, the immediate sugar high created by the TRUMP launch may not prove to be worth the negative attention the coin attracts for any losses incurred by regular investors.
“In the half-decade I’ve spent working in this space, I’ve been adamant about trying to shift the narrative away from the default: That there is a lot of grift and nefarious activity that happens within crypto,” says Tom. “I’m very conscious of that reputation.”
Two days after TRUMP began to trade, first lady Melania Trump launched a memecoin of her own. Its critics voiced a similar chorus of concerns related to alleged conflicts of interest.
The White House did not respond to a request for comment. A request delivered to an email listed on the website for the MELANIA memecoin went unanswered.
The day of the TRUMP launch was a thrill, but now Tom felt deflated. “I was like: This doesn’t feel as good as it did yesterday,” he says. “I definitely did not buy any MELANIA.”