Hash (SHA1):487d7a70e9649916da3fcf99c0700f06d1eee89f
No.: Lianyuan Security Knowledge No.055
The recent Meme market can be said to be a FOMO explosion. Many chains are red-eyed, and various Meme launch platforms have sprung up like mushrooms after rain, full of gunpowder. The project parties, communities, and investors have been thriving together, but under this prosperous appearance, a series of events have made people sweat. Pump.fun suddenly closed the live broadcast, and Pump.Science made a big mistake - the private key leak led to the theft of user assets, and the scene was once very chaotic. So the question is, will these events collapse the Meme market?
1. Multi-chain competition: Meme launch platform involution to take-off
Let’s first take a look at the current competitive situation in the Meme market. As we all know, the core gameplay of Meme is “low cost, high resonance”, plus a little community carnival, anyone can become famous overnight. From Base to Arbitrum, to BSC, almost every chain is trying to grab this opportunity.
At present, many leading launch platforms have emerged, such as BaseAI's token clanker. With the two keywords "AI + Base chain" and its super community operation capabilities, it directly blew up the market and attracted a massive influx of funds in just a few days. From November 8, 2024 to the present, at least three meme coins with a market value of over 10 million US dollars have been born on clanker: LUM (33 million US dollars), ANON (46 million US dollars), and CLANKER (70 million US dollars), and they are still on an upward trend. As of November 26, 2024, in just two weeks, clanker has issued a total of 3,500 tokens and generated $4.2 million in revenue.
Unlike pump.fun, clanker publishes memes on the Web3 social platform Farcaster.
Users only need to @clanker, and then describe the name, content or even picture of the token they want to issue, and clanker will automatically deploy the token. Among them, the token LUM deployed by clanker is a classic case.
There is also Pump.Science, which claims to have introduced the concepts of life sciences and DeSci into the Meme track, becoming a new hot spot and attracting many "science believers" and professional investment institutions.
At the Solana Breakpoint conference of Token 2049, Molecule DAO, a Desci platform of the Solana ecosystem, launched a new meme token issuance platform Pump.Science. Compared with other meme token issuance platforms, the feature of Pump.science is not the token issuance mechanism. Medical researchers can submit drug research proposals on Pump.science, and then use the drugs on worms for testing, and transmit the test results to the front end of the platform. In this process, users can participate in the test process by trading meme coins representing drugs.
Judging from the data, this kind of competition is good for the market - more competition means higher user participation and greater capital inflow. However, when the internal competition reaches this level, it also forces project owners to launch products faster and faster, ignoring safety issues. No one can afford the cost of safety accidents.
2. Pump.Science incident: How did security issues trigger a market trust crisis?
Speaking of safety, the recent Pump.Science incident is a major rollover. As a meme project focusing on the DeSci track, it did attract a lot of people at the beginning. Investors originally thought that this was a project with technical content, but the result was too fast.
Event review: Due to a low-level operational error, the Pump.Science project team’s private key was leaked! What was the result? A large number of investors’ assets were stolen by hackers, and the capital pool was emptied in an instant. According to statistics, the loss caused by this incident was as high as millions of US dollars. The victims almost lost all their money, and the public was outraged.
Where is the security hole?
Technically: The project owner did not use a multi-signature solution, nor did they take any effective private key protection measures.
In terms of process: Before the project went online, it did not undergo a complete security audit, and the entire operation process relied entirely on "faith".
In terms of consciousness: In this market where everything is about speed, Pump.Science is obviously too eager for quick success and ignores the most basic safety protection.
What is the impact? The destructiveness of this incident is not just the loss of funds. It has shaken investors' confidence in the entire Meme track. For a time, panic was prevalent, and market activity and capital liquidity were hit. This impact is difficult to eliminate in the short term.
3. Security Reflection: The Meme Market Can’t Just Be a Carnival, It Must Have a Sense of Security
Security issues frequently occur because the development speed of the entire Meme track far exceeds the project's attention to security. Everyone is pursuing overnight wealth, but ignores the foundation of the "rules of the game".
What is the root cause of the problem?
In order to seize the market, the project owners launched products quickly, but their technical capabilities simply could not support their ambitions.
Investors only care about short-term returns, pay little attention to the safety of the project, and are even too lazy to read the audit report.
what to do?
1) Project side:
Security audits must be strengthened to ensure the absolute security of smart contracts and private keys.
Introduce a multi-signature mechanism to decentralize fund control and reduce single-point risks.
2) Platform level:
We conduct strict security audits on newly launched projects, and those that fail the audits will be rejected.
Promote the industry to formulate unified safety standards to make the entire ecosystem healthier.
3) User level:
Improve security awareness and carefully study the project background and technical details before investing.
If you encounter a project that has not been audited, avoid it and don't pay for it with real money.
4. Future Outlook: Will it collapse?
For a hot meme, there is never a crash, only a decline in popularity. Let's talk about the current market situation. First of all, there is a weakness in market transactions and a lack of liquidity. Memes need a very strong inflow of new funds, which is obviously insufficient at present. Without the inflow of institutional funds, it is difficult to form a ladder effect.
Then there are more and more copycat and meme projects, which constantly disperse the liquidity of the entire crypto market, resulting in market fragmentation and liquidity depletion. Because this round of ordinary users are particularly enthusiastic about the anti-VC trend, which has set off a meme craze. Institutions and VCs are very depressed without emotional support, making the "copycat" even more copycat.
In fact, the essence is still insufficient liquidity, and the existing funds are in pvp. It’s just that some previous memes were too cruel. Not only did they cut the leeks, but they also pulled out the roots. Therefore, a large number of retail users turned the table and stopped playing, because everyone understood what these memes were about, which led to the subsidence of the meme craze.
VCs and small retail investors each closed their doors, said goodbye to each other, and fantasized about their own futures. The separation between users and VCs will make the current situation of insufficient liquidity even uglier.
How to break through in the future? We think that we have already broken through. Is the meme craze not hot enough? It is hot enough! So how to effectively continue it is the most important thing. A sufficiently safe mode and innovative gameplay will be the main theme in the future.
5. The competition is fierce, and the Meme track needs to be safer!
Although the Pump.Science incident has caused some concerns about the Meme market, from another perspective, this crisis actually has positive significance - it forces the entire industry to rethink security issues.
Competition will eliminate those grass-roots projects, leaving only the top players with real technical strength and security. In the future, the Meme track will not only be safer, but also more diversified. For example, it will be combined with popular tracks such as AI and DeSci to inject new vitality into the industry.
Conclusion
The meme track has never lacked carnival, but also lessons. The Pump.Science incident has shown us the shortcomings of the industry, but it also reminds project owners and investors that safety is the bottom line of participating in this game. Only by giving equal importance to safety and innovation can we truly embark on the long-term bull road of Meme.
The last word for investors: No matter how tempting the market is, don’t forget to stay calm. A true “value meme” often takes time to settle, rather than a FOMO.
