Staging PDF smoke 2026-05-16T23:16:44.731Z

Analyst Discussion: fun Kinji Steimetz Seth Bloomberg Apr 13, 2024 ⋅ 6 min read Prompt Amidst the memecoin focus of the current bull cycle, will the new token launch and trading platform, fun, be able to establish a long- lasting competitive edge or is it just another passing fad? Primer Over the past few months, the crypto market has witnessed an unprecedented memecoin frenzy across various chains. This surge in memecoin activity has not only captivated the attention of investors and traders but has also marked memecoins as one of the highest performing sectors since the start of the year.

This wave has led to a notable increase in onchain activity, consequently elevating gas prices and intensifying network congestion. Since Q4 2023, these platforms have seen their active onchain traders more than double, highlighting the significant pull memecoins have in attracting new and existing participants to engage more actively within these ecosystems. Among the stars of this memecoin saga are Dogwifhat, Jeo Boden, and Pepe, emerging as new potential frontrunners in the sector. However, for every successful token, there are countless others that fail to gain traction or, worse, turn out to be scams. This landscape creates a minefield for investors, making it exceedingly challenging to discern which tokens might have staying power or, fundamentally, which ones are legitimate.

Enter fun, a new platform tailored for the launch and trading of memecoins. Launched initially for Solana tokens in January and later extending support to Blast in February, fun enables anyone to create and launch an instantly tradable new token without the necessity for seed liquidity. This lowers the barrier to entry compared to traditional methods, which involve significant costs and complexities, including the funding of liquidity pools for user trading. fun also simplifies the process for deployers, who need only select a name, ticker, and image to commence trading on a bonding curve for just a few dollars.

On Solana, when enough users buy the token to reach a market capitalization of $69,000, $12,000 of liquidity is then added into the DEX, Raydium. Similarly, on Blast, achieving a market cap of $420,000 triggers the addition of $30,000 in liquidity to the Thruster DEX. Furthermore, fun takes measures to safeguard against the prevalent issue of rug pulls by ensuring that each token launched on its platform is a fair launch, with no presale and no team allocation. This commitment to security and fairness has been a key factor in the platform's success, generating nearly $6 million in revenue over the past month alone, with daily revenues passing $400,000 via platform trading fees.

As interest in memecoins grows, platforms like fun play a crucial role in defining how these digital assets are developed, exchanged, and appraised. By making the creation process more accessible and lowering entry barriers, they contribute to the market's growth and provide insights into the future possibilities of decentralized finance, emphasizing its capacity for broader participation and innovation. Analyst Discussion Kinji While fun lowers barriers to entry for memecoin creators by reducing upfront capital requirements, it struggles to protect itself against new competitors due to the lack of a core defensible asset or product offering.

fun creates a bonding curve for new memecoin deployments, which, although helpful, is a commodity that can be easily copied. Additionally, the protocol does not control its own liquidity, which could provide a liquidity moat, and launching a new memecoin already has low barriers to entry, as seen in the proliferation of meme assets. Consequently, over time, competition may use token incentives to draw users away from fun and reduce its margins to near-zero levels. fun is likely to follow a pattern similar to NFT marketplaces, where the initial market leader achieves high valuations driven by scarcity rather than fundamentals before competitors enter the market and siphon away value and users.

fun benefits from being the only pureplay memecoin platform for investors, particularly appealing to those who believe in the memecoin supercycle. For these investors, fun offers a focal point for market-wide memecoin exposure. This is especially true for institutional investors (hedge and venture funds), who may find it easier to justify an infrastructure investment like fun rather than directly investing in leading meme coins. Initially, fun may raise capital at high valuations due to this scarcity dynamic, but the scarcity premium will decrease as competitors enter the market and scarcity is no longer an investment driver.

Seth As Kinji points out, the lack of obvious moats hurts its prospects of establishing itself as a successful, long-term application. However, at least for the moment, it does have a key piece of leverage — attention. Capturing attention creates space for fun to develop a go-to-market strategy that, if successful, should both retain existing users and attract new ones. Mason Nystrom describes well the strategies that many SocialFi applications implement: • Financial-first: Focus on the financial component, an exchange) and then develop social features around it. • Social-first: Create a social experience and then embed financial features.

fun seems to have adopted the former approach, with its primary service overtly being a tool for deploying and trading memecoins. It does have something akin to a chatroom per token, but it’s still in a primitive state. The early success of fun’s financial-first approach can now begin to be coupled with social experiences or features. Like many applications, it may seek to implement some variant of a point system, which would encourage frequent or recurring activity on the platform. Alternatively, it could create a system that rewards traders or memecoins deployers who attain a daily activity streak.

A platform-wide trade competition could also be developed, with the top- performing traders receiving rebates. To incentivize smaller groups to form within the application, it could setup the infrastructure to create more localized competitions that are either token-gated or a “stake-to-enter” model. The winners could get some cut of the total staked amount. Consumer attention is notoriously fickle, even more so within the crypto space, but it does tend to follow incentives aggressively. Given the numerous options of incentive programs and social features yet to be deployed, fun is in a prime position to hold onto its first- mover advantage and continue to gain adoption.