Rug Pulling, Market Maker Raking, What Can Save the Much-Maligned TGE?

By: blockbeats|2025/04/05 03:15:03

Original Article Title: Between Extremes: A DeFi-Native Blueprint for Sustainable TGEs
Original Article Author: DougieDeLuca, Figment Capital Member
Original Article Translation: Rhythm Xia Deep

Editor's Note: The article reviews the advantages and disadvantages of two TGE models: low circulating supply/high FDV and fair distribution. It points out that the former enables insiders to cash out quickly, while the latter struggles due to insufficient funding and liquidity. Based on market lessons, it proposes a DeFi-native TGE scheme that utilizes on-chain liquidity, staged price unlocks, and a transparent smart contract mechanism to balance the team's funding needs with public price discovery. It also incentivizes insiders to align with the project's long-term goals, thus building a more sustainable tokenomic structure.

Below is the original content (slightly reorganized for readability):

Why Rethinking TGE is Necessary

A TGE is often a defining moment in a project's lifecycle. It marks the most significant transition from the private domain to the public domain. Different stakeholders have different expectations of the TGE, making it a complex task that requires careful coordination.

Over the past 18 months, we have seen two mainstream TGE approaches: low circulating supply/high FDV issuance and fair distribution. These two approaches are at opposite ends of the spectrum, each with clear advantages and disadvantages. However, in achieving long-term sustainable outcomes, these approaches have mostly fallen short. As the crypto ecosystem continues to evolve, we believe it is time to take a step back, learn from history, and decide whether a change is needed.

This article proposes an intermediate TGE model that leverages on-chain liquidity to promote genuine public price discovery and ensure alignment of incentives between insiders—the team and investors—and long-term success. Before delving into its mechanisms, let us first examine how the two mainstream TGE approaches have faltered due to their own flaws, what the market reaction has taught us, and why an on-chain-centric approach is the logical next step for projects pursuing sustainable success.

Flaws in Recent TGE Models

Low Circulating Supply/High FDV

The low circulating supply/high FDV model typically involves multi-round pre-TGE financing, with valuation gradually increasing and an extremely low initial circulating supply on the first day. Initially, this can create a scarcity illusion that drives a sharp price surge. However, over time, issues arise:

· Private Pre-TGE Price Discovery: The team conducts multiple rounds of financing at increasingly higher valuations and negotiates to ensure listing on a mainstream centralized exchange (CEX) on the first day. By the time of the TGE, most of the price appreciation has already occurred, leaving few buyers in the public markets.

· Expensive Top-Tier Exchange Listing: Many projects need to pay up to 10% or more of the token supply as a fee to list on a top-tier exchange on the first day. This highly dilutes ownership and often harms the project's long-term prospects.

· Overreliance on Market Maker (MM) Trading: To ensure initial liquidity, projects allocate a large number of tokens to third-party market makers under loose terms. These trades lack transparency, often leading to misaligned incentives and ongoing burdens for the project.

· Investor Position Locking Hedge: Due to long-term token locking, savvy investors/funds short the asset in the external market to effectively hedge their exposure, laying the groundwork for sell pressure post-unlock.

· Discounted Over-the-Counter (OTC) Sales: Investors and teams often sell at a discount through OTC to buyers seeking lower prices, who then hedge their newly acquired discounted positions and close them out at unlock.

· Providing Liquidity Fund Kickbacks: Teams may offer "sweeteners" or private deals to liquidity funds to induce early post-TGE purchases, artificially driving up the price. This potentially illicit activity provides insiders with a brief window to exit OTC at inflated valuations.

· Investor Unlocking Triggers Unsustainable Sell Pressure: Once a large amount of tokens unlocks, retail investors must consider whether the looming supply will overwhelm the market. If there is insufficient demand for the product (or token), unlocking can lead to price stagnation or a collapse under selling pressure.

Essentially, the low circulation/high FDV model has fostered an environment where insiders can quickly cash out, often leaving retail or late buyers at a disadvantage. Projects often struggle after the first year as early profiteers lack the incentive to continue involvement.

The Shift to Fair Distribution — and Its Own Pitfalls

Disappointment with the failure of the low circulation/high FDV model has prompted the market to pivot towards supporting fair distribution. Fair distribution aims to create an open, equitable TGE structure by initially placing tokens in the hands of the public, reducing insider advantages and large-scale private allocations. Despite good intentions, this distribution strategy has gradually revealed its own flaws:

· Limited Funding: Fair distribution teams usually start the TGE with very little or no funding. As the team's token supply is usually very low, fundraising post-TGE becomes extremely challenging, hampering the project's long-term viability, especially during continuous token price declines.

· Low Liquidity and Poor Execution: The lack of market makers and initial liquidity results in fair-launched tokens having poor liquidity during launch and maturation, leading to high volatility and slippage.

· CEX Perpetual Contracts Amplifying Downside Pressure: Many fair-launched tokens—especially in the AI space—had already been listed on centralized exchanges (CEXs) with perpetual futures contracts before entering the spot market, allowing leveraged short positions to significantly impact tokens with shallow on-chain liquidity, thus driving down prices.

· Long-Term Price Ceiling: Limited on-chain liquidity combined with leveraged shorting ultimately creates an environment where demand struggles to surpass suppressive sell pressure.

Fair launch initially stood as a beacon of hope, encouraging a more "open" participation. However, it ultimately failed to establish a sustainable long-term market structure. The market is once again seeking alternative solutions.

Market Response Learnings

Both low circulating supply/high fully diluted valuation (FDV) and fair launch approaches failed in their own ways. Observing the market's response to both, we learn the following lessons:

· Public Price Discovery Is Critical: If the public buyers cannot participate effectively in price discovery, they will lose interest, especially when insiders clearly cash out well in advance.

· Depth and Liquidity Trump Short-Term Hype: Quick speculation or pump-and-dumps cannot fix a fundamentally illiquid market. Sustained on-chain liquidity depth is crucial.

· Teams Need Runway, Retail Buyers Need Upside: Teams must raise enough funds to ensure the project's long-term survival while leaving significant upside potential for public market newcomers.

· Market Demand Drives Structural Change: The evolution from low circulating supply/high FDV to fair launch indicates that if the market refuses to support flawed issuance methods, teams will adapt. However, relying solely on fair launch cannot guarantee success without liquidity building and long-term market strategy.

· Transparency Is Non-Negotiable: When insiders exploit opaque market structures to swiftly exit, trust collapses. Fair launch has spurred more on-chain openness, but true accountability and clarity remain incomplete.

Why On-Chain Liquidity Is the Next Step

Reflecting on these failures and market pushback highlights a core principle: a long-term sustainable market needs to conduct price discovery openly on-chain, where insiders cannot easily offload tokens in private. On-chain trading fosters real-time accountability, clearly showing who holds what assets and at what price they sell.

Ensuring adequate liquidity at all stages of a token's lifecycle requires a structure that integrates the following elements:

· Transparent On-Chain Market Depth

· Robust Mechanism to Restrain Sudden Sell Pressure

· Incentivize Team and Investors for Long-Term Engagement Post TGE

This directly leads to the concept of a DeFi-native TGE—an amalgamation of capital raising and public liquidity formation, aligning insiders with the project's long-term destiny.

DeFi-Native TGE

Our proposal core lies in:

· Transforming potential sell pressure into structured on-chain liquidity

· Employing price/time-based vesting instead of large cliff-vesting

· Proposing a transparent sustainable path to mainstream CEX listing

· Enabling insiders—investors and team members—to activate or even necessitate on-chain mechanisms

The specific approach is as follows:

Phased Liquidity Provision (Single-Sided and Dual-Sided)

· Single-Sided LP: Investors can deposit only the native token into a concentrated liquidity pool (e.g., Uniswap V3). By selecting a specific price range, they effectively set a conditional sell order—the token is sold only when the market reaches that range.

· Dual-Sided LP: To provide deeper liquidity and reduce slippage, participants (including the team) can pair the token with a stablecoin or other assets (e.g., ETH). This facilitates immediate market depth.

Price-Based Vesting and Locking LP Positions

· Gradual Unlocking: The project restricts the LP share each investor can have at TGE. With time or price threshold increases, more shares unlock, preventing sudden supply shocks.

· LP Locking: To restrain speculative behavior (e.g., manipulating prices to hit the LP range), liquidity providers need to lock their position for a period post-token conversion, unable to withdraw immediately and re-enter stealthily, maintaining liquidity consistency.

Incentivizing Early Investors to Exit Pre-TGE

· Lower Price Targets vs. New Investors: The team can incentivize early investors with very low-cost entry to partially exit before TGE through oversubscribed high-price rounds for new investors. This can be achieved through a transfer from existing investors to new investors, ultimately approved by the team. In this scenario, early investors can profit without selling on the public market, while new supporters—with a higher entry price—have a lower tendency to sell early post-launch. It is worth noting that historically, such transfers have often been rejected by teams.

· Healthier Post-TGE Structure: Therefore, the investor base at TGE is more likely to hold tokens for higher multiples, reducing immediate sell pressure, and evenly distributing liquidity within the price range.

Smart Contract Governance and Compliance

· Compliance Pool and Structured Withdrawals: Through enforced policy constraints (such as AML fund flow checks), locked tokens can only flow into approved on-chain markets in a publicly visible, rule-based manner.

· Gradual Access: Smart contracts govern how and when LPs adjust price ranges, collect fees, or withdraw, ensuring insider sell-offs do not crash the market.

TGE Pricing and Team Inclusion

· Attractive and Sustainable Valuation: Projects may undergo TGE at a valuation lower than the typical low float/high FDV, attracting genuine buyer interest. Over time, on-chain price and trading volume can naturally increase, eventually attracting mainstream listings.

· Team Allocation Inclusion: The team is subject to the same LP constraints on their holdings, signaling true alignment. In an environment where market demands transparency, team positions can also be publicly monitored, curbing silent OTC sales or sudden insider exits.

Gradual Move Towards CEX Listing

Delayed Early Listing: Initially reducing exposure on major exchanges helps the market discover price on-chain without immediate insider exit pathways.

Catalyst: With increasing utilization, trading volume, and community traction, mainstream CEX listings become a genuine demand-driven factor rather than a quick sell-off scenario.

Expected Benefits

This DeFi-native TGE model addresses many issues while supporting deeper public price discovery:

· Authentic On-Chain Discovery: Launching at a fair price and requiring insiders to provide liquidity promotes real-time transparent price formation.

· Healthier Unlocking Patterns: Price-based token unlocks reduce the fear of large cliff sell-offs. If buyers do not push the price to a specific range, insiders remain locked.

· Enhanced Liquidity, Reduced MM Dependency: Key stakeholders become initial liquidity providers, reducing reliance on market makers with potential conflicts of interest.

· Unity Between Teams and Investors: If core contributors also face liquidity constraints, they cannot silently abandon the project; success is shared.

· Robust Market Support: Combining gradual CEX listing, the project goes through incremental catalysts while building a stronger on-chain reputation.

· Experimentation Space: Due to this programmable approach, the team can adjust lock-up periods, price thresholds, or whitelist pools to pursue the optimum outcome.

Most importantly, it aligns founders, early investors, and new participants towards sustainable long-term growth rather than quick opportunistic exits.

Issues and Considerations

Even though this model addresses common TGE failures, it sparks further exploration:

· Liquidity Concentration: Could a large number of holders cluster in similar ranges, forming a price "wall"? If so, how can this be prevented?

· Order Book vs. AMM: Is concentrated liquidity AMM always superior, or is a hybrid approach more suitable for certain tokens?

· Execution and Regulation: Are there compliance requirements (such as KYC/AML) that investors need to meet to participate?

· Investor Education and Tools: Is there a need for a dedicated dashboard or third-party manager to help inexperienced or resource-constrained insiders handle advanced LP strategies?

· Team Transparency: While forward contracts or private sales may continue, requiring insiders to fully or nearly fully disclose will drive honesty.

Summary

From low supply/high FDV to fair distribution, the crypto world oscillates between extremes—a model that brings short-term profits for insiders versus one lacking enough funding or sustainable liquidity to succeed. Both choices lead participants to optimize short-term outcomes, feeling disillusioned by transient pumps and manipulation.

By introducing DeFi-native TGE—rooted in phased on-chain liquidity, metric-based incremental unlocks, and enforced transparency—we have paved a path:

· Projects raise sufficient capital without relying on exploitative trading.

· Genuine on-chain price discovery and liquidity development, building trust with retail and institutional investors.

· Early investors with lower price targets can safely exit pre-TGE to newcomers with higher costs and valuations, optimizing secondary market health.

· Mainstream CEX listings become a true catalyst rather than an immediate exit ramp.

· The market as the ultimate arbiter can reward or reject issuance based on alignment with these principles.

While not a one-size-fits-all TGE model for every project, it is clear that we need a blueprint to promote genuine on-chain price discovery, robust market liquidity, and deep alignment among stakeholders. The DeFi-native TGE model aims to take a meaningful step towards these goals.

The crypto ecosystem thrives on innovation and iteration. By challenging the norms of low supply/high FDV and fair distribution, we can pave the way for a healthier incentive structure — ensuring long-term value creation prevails over short-term speculation.

Ultimately, if this article can inspire a discussion on integrating the best aspects of various TGE models, encouraging rewards for real growth rather than quick exits through new solutions, then we have accomplished our mission. Let us together build a token issuance environment where everyone can benefit from sustained success, where the market fairly rewards those who strive for a brighter future in crypto — the builders, investors, and community members.

「Original Article Link」

On May 13, S&P Dow Jones Indices announced that Coinbase would officially replace Discover Financial Services in the S&P 500 on May 19. While other companies like Block and MicroStrategy, closely tied to Bitcoin, were already part of the S&P 500, Coinbase became the first cryptocurrency exchange whose primary business is in the index. This also signifies that cryptocurrency is gradually moving from the fringes to the mainstream in the U.S.

On the day of the announcement, Coinbase's stock price surged by 23%, surpassing the $250 mark. However, just 3 days later, Coinbase was hit by two consecutive events: a hack where employees were bribed to steal customer data and a demand for a $20 million ransom, and an investigation by the U.S. Securities and Exchange Commission (SEC) into the authenticity of its claim of having over 100 million "verified users" in its securities filings and marketing materials. These two events acted as mini-bombs, and at the time of writing, Coinbase's stock had already dropped by over 7.3%.

Coincidentally, Discover Financial Services, being replaced by Coinbase, can also be considered the "Coinbase" of the previous payment era. Discover is a U.S.-based digital banking and payment services company headquartered in Illinois, founded in 1960. Its payment network, Discover Network, is the fourth largest payment network apart from Visa, Mastercard, and American Express.

In April, after the approval of the acquisition of Discover by the sixth-largest U.S. bank, Capital One, this well-established digital banking company of over 60 years smoothly handed over its S&P 500 "seat" to this emerging cryptocurrency "bank." This unexpected coincidence also portrayed the handover between the new and old eras in Coinbase's entry into the S&P 500, resembling a relay race scene. However, this relay baton also brought Coinbase's accumulated "external troubles and internal strife" to a tipping point.

Side Effects of ETFs

Over the past decade, cryptocurrency exchanges have been the most stable "profit machines." They play a role in providing liquidity to the entire industry and rely on trading fees to sustain their operations. However, with the comprehensive rollout of ETF products in the U.S. market, this profit model is facing unprecedented challenges. As the leader in the "American stack," with over 80% of its business coming from the U.S., Coinbase is most affected by this.

Starting from the approval of Bitcoin and Ethereum spot ETFs, traditional financial capital has significantly onboarded users and funds that originally belonged to exchanges in a more cost-effective, compliant, and transparent manner. The transaction fee revenue of cryptocurrency exchanges has started to decline, and this trend may further intensify in the coming months.

According to Coinbase's 2024 Q4 financial report, the platform's total trading revenue was $417 million, a 45% year-on-year decrease. The contribution of BTC and ETH's trading revenue dropped from 65% in the same period last year to less than 50%.

This decline is not a result of a decrease in market enthusiasm. In fact, since the approval of the Bitcoin ETF in January 2024, the inflow of BTC into the U.S. market has continued to reach new highs, with asset management giants like BlackRock and Fidelity rapidly expanding their management scale. Data shows that BlackRock's iShares Bitcoin ETF (IBIT) alone has surpassed $17 billion in assets under management. As of mid-May 2025, the cumulative net inflow of 11 major institutional Bitcoin spot ETFs on the market has exceeded $41.5 billion, with a total net asset value of $1214.69 billion, accounting for approximately 5.91% of the total Bitcoin market capitalization.

Chart showing the trend of net outflows for Grayscale among the 11 institutions

Institutional investors and some retail investors are shifting towards ETF products, partly due to compliance and tax considerations. On one hand, ETFs have much lower trading costs compared to cryptocurrency exchanges. While Coinbase's spot trading fee rate varies annually in a tiered manner but averages around 1.49%, for example, the management fee for IBIT ETF is only 0.25%, and the majority of ETF institution fees fluctuate around 0.15% to 0.25%.

In other words, the more rational users are, the more likely they are to move from exchanges to ETF products, especially for investors aiming for long-term holdings.

According to multiple sources, several institutions, including VanEck and Grayscale, have submitted applications to the SEC for a Solana (SOL) ETF, with some institutions also planning to submit an XRP ETF proposal. Once approved, this may trigger a new round of fund migration. According to a report submitted by Coinbase to the SEC, as of April, the platform's trading revenue from XRP and Solana accounted for 18% and 10%, nearly one-third of the platform's fee revenue.

However, the Bitcoin and Ethereum ETFs passed in 2024 also reduced the fees for these two tokens on Coinbase from 30% and 15% to 26% and 10%, respectively. If the SOL and XRP ETFs are approved, it will further undermine the core fee revenue of exchanges like Coinbase.

The expansion of ETF products is gradually weakening the financial intermediary status of cryptocurrency exchanges. From their original roles as matchmakers and clearers to now gradually becoming mere "on-ramps and off-ramps" for funds, exchanges are seeing their marginal value squeezed by ETFs.

Robinhood Takes a Stand, Traditional Brokerages Join the Fray

On May 12, 2025, SEC Chairman Paul S. Atkins gave a keynote speech at the Tokenization and Cryptocurrency Working Group roundtable. The theme of his speech revolved around "It is a new day at the SEC," where he indicated that the SEC would not approach enforcement and regulation the same way as before but would instead pave the way for cryptocurrency assets in the U.S. market.

With signs of cryptocurrency compliance such as the SEC's "NEW DAY" declaration, an increasing number of traditional brokerages are attempting to enter the cryptocurrency industry. One of the most representative cases is the well-known U.S. brokerage Robinhood, which began expanding its crypto business in 2018. By the time of its IPO in 2021, Robinhood's crypto business revenue accounted for over 50% of the company, with a significant boost from the Dogecoin "moonshot" promoted by Musk.

In Q1 2025 earnings report, Robinhood showcased strong growth, especially in revenue from cryptocurrency and options trading. Fueled by Trump's Memecoin, cryptocurrency-related revenue reached $250 million, nearly doubling year-over-year. Consequently, Robinhood Gold subscription users reached 3.5 million, a 90% increase from the previous year, with the rapid growth of Robinhood Gold providing the company with a stable source of income.

Meanwhile, RobinHood is actively pursuing acquisitions in the cryptocurrency space. In 2024, it announced a $2 billion acquisition of the long-standing European cryptocurrency exchange Bitstamp. Additionally, Canada's largest cryptocurrency CEX, WonderFi, which recently went public on the Toronto Stock Exchange, also announced its integration with RobinHood Crypto. After obtaining virtual asset licenses in the UK, Canada, Singapore, and other markets, RobinHood has taken a proactive approach in the compliant cryptocurrency trading market.

Furthermore, an increasing number of brokerage firms are exploring the same path. Futu Securities, Tiger Brokers, and others are also dipping their toes into cryptocurrency trading, with some having applied for or obtained the VA license from the Hong Kong SFC. Although their user bases are currently small, traditional brokerages have a natural advantage in user trust, regulatory licenses, and low fee structures. This could pose a threat to native cryptocurrency platforms in the future.

User Data Breach: Is Coinbase Still Secure?

In April 2025, security researchers discovered that some Coinbase user data was leaked on the dark web. While the platform initially responded by attributing it to a "technical misinformation," it still raised concerns among users regarding its security and privacy protection. Just two days before Dow Jones Indexes announced Coinbase's addition to the S&P 500 Index, on May 11, 2025, Coinbase received an email from an unknown threat actor claiming to have obtained customer account information and internal documents, demanding a $20 million ransom to keep the data private. Subsequent investigations confirmed the data breach.

Cybercriminals obtained the data by bribing overseas customer service agents and support staff, mainly in "non-U.S. regions such as India." These agents abused their access to Coinbase's internal customer support system and stole customer data. As early as February this year, blockchain detective ZachXBT revealed on X platform that between December 2024 and January 2025, Coinbase users lost over $65 million to social engineering scams, with the actual amount potentially higher.

Among the victims was a well-known figure, 67-year-old Ed Suman, an established artist in the art world for nearly two decades, having been involved in the creation of artworks such as Jeff Koons' "Balloon Dog" sculpture. Earlier this year, he fell victim to an impersonation scam involving fake Coinbase customer support, resulting in a loss of over $2 million in cryptocurrency. ZachXBT critiqued Coinbase for its inadequate handling of such scams, noting that other major exchanges have not faced similar issues and recommending Coinbase to enhance its security measures.

Amidst a series of ongoing social engineering incidents, although there has not been any impact on user assets at the technical level so far, it has raised concerns among many retail and institutional investors. Especially institutions holding massive assets on Coinbase. Just considering the U.S. BTC ETF institutions, as of mid-May 2025, they collectively hold nearly 840,000 BTC, and 75% of these are custodied by Coinbase. If we price BTC at $100,000, this amount reaches a staggering $63 billion, which is equivalent to the nominal GDP of two Iceland in the year 2024.

Visualization: ChatGPT, Source: Farside

In addition, Coinbase Custody also serves over 300 institutional clients, including hedge funds, family offices, pension funds, and endowments. As of the Q1 2025 financial report, Coinbase's total assets under management (including institutional and retail clients) reached $404 billion. The specific amount of institutional custodied assets was not explicitly disclosed in the latest report, but it should still be over 50% based on the Q4 2024 report.

Visualization: ChatGPT

Once this security barrier is breached, not only could the rate of user attrition far exceed expectations, but more importantly, institutional trust in it would undermine the foundation of its business. Therefore, after a hacking event, Coinbase's stock price plummeted significantly.

CEXs are All in Self-Rescue Mode

Facing a decline in spot trading fee revenue, Coinbase is also accelerating its transformation, attempting to find growth opportunities in derivatives and emerging assets. Coinbase acquired a stake in the options platform Deribit at the end of 2024 and announced the official launch of perpetual contract products in 2025. This acquisition fills in Coinbase's gap in options trading and its relatively small global market share.

Deribit has a strong presence in non-U.S. markets, especially in Asia and Europe. The acquisition has enabled Coinbase to gain a dominant position in bitcoin and ethereum options trading on Deribit, accounting for approximately 80% of the global options trading volume, with daily trading volume remaining above $2 billion.

Meanwhile, 80-90% of Deribit's customer base consists of institutional investors, with their professionalism and liquidity in the Bitcoin and Ethereum options market highly favored by institutions. Coinbase's compliance advantage, coupled with its already robust institutional ecosystem, makes it even more suitable. By using institutions as an entry point, it can face the squeeze from giants like Binance and OKX in the derivatives market.

Facing a similar dilemma is Kraken, which is attempting to replicate Binance Futures' model in non-U.S. markets. Since the derivatives market relies more on professional users, fee rates are relatively higher and stickiness is stronger, making it a significant source of revenue for exchanges. In the first half of 2025, Kraken completed the acquisition of TradeStation Crypto and a futures exchange, aiming to build a complete derivatives trading ecosystem to hedge the risk of declining spot transaction fee income.

With the surge of Memecoin in 2024, Binance, OKX, and various CEX platforms began massively listing small-market-cap, highly volatile tokens to activate active trading users. Due to the wealth effect and trading activity of Memecoins, Coinbase was also forced to join the battle, successively listing popular tokens from the Solana ecosystem such as BOOK OF MEME and Dogwifhat. Although these coins are controversial, they are frequently traded, with fee rates several times higher than mainstream coins, serving as a "blood-boosting" method for spot trading.

However, due to its status as a publicly traded company, this practice is a riskier endeavor for Coinbase. Even in the current crypto-friendly environment, the SEC is still investigating whether tokens like SOL, ADA, and SAND constitute securities.

In addition to the forced transformation strategies carried out by the aforementioned CEXs, they are also starting to lay out RWAs and the most talked-about stablecoin payment fields, such as the PYUSD launched through a collaboration between Coinbase and Paypal, Coinbase's support for the Euro stablecoin EURC by Circle that complies with EU MiCA regulatory requirements, or the USD1 launched through a collaboration between Binance and WIFL. In the increasingly crowded trading field, many CEXs have shifted their focus from just the trading market to the application field.

The golden age of transaction fees has quietly ended, and the second half of the crypto exchange platform game has silently begun.

Arthur Hayes: Why I'm Betting on ETH While the Market Is Obsessed with SOL

"I personally have also allocated 20% to gold, expecting the price of gold to potentially rise to $10,000-20,000 by the end of this market cycle."

CryptoPunks Changes Hands Twice, Did the Originator of NFTs Finally Find Its "Forever Home" This Time?

The original NFT pioneer CryptoPunks has once again officially changed ownership after being sold to the Bored Ape Yacht Club (BAYC) developer Yuga Labs.

The End and Rebirth of NFTs: How the Meme Coin Craze Ended the PFP Era?

There must be another Labubu hidden beneath the ruins.

Key Market Intelligence on May 14th, how much did you miss out on?

Within 24 hours, GOONC's market cap soared to 70 million, could GOONC be the next billion-dollar dog on the Believe platform?

Bitcoin has broken $100,000, Ethereum has surpassed 2500, and is Solana's hot streak about to make a comeback?

The current market is in a state of macro euphoria, with GOONC riding the wave today, skyrocketing 10x in just a few hours, reaching a market cap of tens of millions of dollars, trading volume soaring past 50 million, and rumors swirling that the developer may be from OpenAI (unconfirmed but intriguing enough).

The "gooning" Culture in Forums

A ludicrous and absurd Solana meme that some actually buy into.

GOONC is a meme coin that has sprouted from the "gooning" subculture, offering no technological innovation or practical use, its sole function being speculation.

It takes inspiration from an NSFW term "gooning," which refers to a person being deeply immersed in certain content (you know what), eventually entering a nearly religious-like trance.

In Reddit (such as r/GOONED, r/GoonCaves) and some counterculture media outlets (such as MEL Magazine in 2020), "gooning" has gradually transitioned from an adult label to a meme-addicted, digital content and virtual self-indulgence synonym, arguably the epitome of Degen spirit.

GOONC is playing around with this concept, packaging the addictive nature, uselessness, and irony of gooning into a tradable financial product. The project team has made it clear: "We do not solve blockchain problems, we only trade absurdity." Blunt but oddly genuine.

GOONC launched on May 13, 2025, using the meme coin launch platform Believe App's LaunchCoin module on Solana. This tool is highly Degen: zero technical barriers, a few clicks to create a coin, perfect for projects like GOONC that can come up with ideas out of the blue.

The mastermind behind GOONC is also quite something and is the most talked-about, with KOL @basedalexandoor on X platform (alias "Pata van Goon") personally involved. His profile even caught the attention of Marc Andreessen, co-founder of a16z, making onlookers unable to resist speculating if GOONC has a hint of OpenAI lineage.

While this 'OpenAI Endorsement' is currently just community speculation, it is definitely a good card to play to fuel hype. Saying "we are pure speculation" on one hand, while tagging a few "AI + a16z" on the other.

From Wasteland to Moon in One Night

GOONC took off as soon as it launched. After its launch on May 13, 2025, its market capitalization skyrocketed to $22 million within 4 hours, with a trading volume exceeding $25.6 million in 24 hours. According to platform data, the first day of trading saw an astonishing +41,100% surge, soaring from $0.0000001 to $0.02, becoming a "missed-the-boat" situation.

GOONC quickly formed an active trading community post-launch, with a lot of discussion and trading signals appearing on X platform (such as the 292x return signal provided by DeBot). Liquidity pools on exchanges like Raydium and Meteora grew rapidly, supporting high trading volumes and price increases.

The real climax occurred between May 13 and May 14, with the market cap rising to $5.5 million in the morning and directly surpassing $55 million in the afternoon. By the 14th, it briefly approached a $70 million market cap, with the trading volume soaring to $59 million. Some community members even posted screenshots claiming an increase of +85,000%, creating a new myth out of the ruins.

As of 1:30 pm on May 14, the price stabilized around $0.039, with a total market cap and FDV both around $39.6 million, and a 24-hour trading volume of $5.43 million. Active platforms include XT.COM, LBank, Meteora, and others.

Although there was a slight pullback from the peak ($0.07), the coin's popularity remains strong. For a coin that relies purely on "irony + community + X post" to thrive, this performance is already at a stellar level.

Currently, the background of the token's development team is not transparent, increasing the potential risk of a rug pull. Rugcheck.xyz warns that the creator of the GOONC contract may have permission to modify the contract (e.g., change fees or mint additional tokens), posing certain security risks.

Community members speculate that the meteoric rise of GOONC may be the "last hurrah".

After Surging 40%, Has Ethereum Price Peaked Upon Exiting the Craze?

Whether you are an insider or an outsider, these days you must be familiar with the news about Ethereum. The reason is simple, causing Ethereum enthusiasts to sigh with emotion and almost throwing off-guard those who defend Ethereum, Ethereum, with a "3-day surge of 40%," climbed to the top of the Douyin Hot List.

Where Does the Rally Come From?

As we all know, Ethereum launched the Pectra upgrade on May 7th. This most significant network upgrade since early 2024 integrates the Prague execution layer hard fork and the Electra consensus layer upgrade, significantly improving Ethereum's performance through 11 improvement proposals. The account abstraction feature (EIP-7702) allows users to flexibly manage wallets through social media accounts or multi-signature schemes, reducing the user threshold, attracting more users and developers. The staking mechanism optimization increases the validator ETH cap from 32ETH to 2048ETH and introduces a flexible withdrawal method, making it easier for institutions and individuals to participate in network security, enhancing the market's confidence in Ethereum's long-term value.

At the same time, Pectra optimized the interaction efficiency of Layer 2 networks such as Arbitrum and Optimism, making transactions faster and cheaper, leading to a surge in on-chain activity. As a crucial step for Ethereum's transition from "2G" to "5G," the Pectra upgrade not only enhances network vitality but also "recharges confidence" in the market, directly driving the price increase.

Related Reading: "Ethereum Skyrockets 22% in One Day, E Enthusiasts Rejoice"

It's not just Ethereum itself, as Wall Street also brought important bullish news.

The world's largest asset management company, BlackRock, proposed to the SEC allowing Ethereum ETFs for staking. This proposal is expected to elevate Ethereum ETFs from a mere investment tool to a bond-like "interest-bearing asset," bringing investors both capital appreciation and passive income, igniting market optimism about Ethereum's future potential.

Specifically, BlackRock has proposed to amend its S-1 filing to allow investors to create and redeem ETF shares directly with Ethereum instead of the U.S. dollar (i.e., in-kind redemption). This move, combined with its $2.9 billion BUIDL Fund launched in March 2024, aims to deepen the integration of traditional finance with blockchain. The BUIDL Fund is a tokenized fund operating on the Ethereum network, investing in traditional assets such as U.S. Treasury bonds. This setup is highly attractive to institutional investors, as they can not only benefit from Ethereum's price appreciation but also earn stable cash flow through staking.

Robert Mitchnick, BlackRock's Head of Digital Assets, stated in a CNBC interview in March 2025 that the addition of staking functionality will significantly enhance the appeal of the Ethereum ETF. He admitted that when the Ethereum spot ETF was launched in July 2024 without staking functionality, the market demand was lackluster, and staking could be the key to reversing this trend.

Meanwhile, the SEC's shifting stance on cryptocurrency regulation has also fueled this upward trend. During the tenure of the previous SEC chairman, the regulatory approach was tough, and staking was strictly viewed through the Howey test as a potential unregistered security. Therefore, when approving the Ethereum spot ETF in May 2024, staking functionality was explicitly prohibited.

However, with Trump back in the White House and Paul Atkins taking over the SEC, there has been a noticeable relaxation in crypto regulation. Apart from BlackRock, ETF issuers such as Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted applications for similar staking and in-kind redemption.

Related reading: "New Chairman Takes Office, SEC Transforms into 'Crypto Daddy' Within 48 Hours"

If staking ETFs are approved, the benefits are likely to go beyond price appreciation. The introduction of staking functionality could redefine the role of crypto assets, making them more similar to traditional financial products that provide returns and value appreciation, thereby driving Ethereum closer to mainstream finance.

Currently, the SEC still needs to address several decisions related to crypto ETFs, including whether to approve ETFs for Solana, XRP, Litecoin, and even Dogecoin. With the calls for an "altcoin season" growing louder, Ethereum's strong performance may just be the beginning of a larger crypto market frenzy.

In addition, the Trump family-related DeFi project WLFI is also bullish on this wave of rise, with frequent on-chain activities. According to on-chain data analyst @ai_9684xtpa's monitoring, a WLFI-related address is currently borrowing coins to go long on ETH, borrowing 4 million U from Aave to buy 1590 ETH at an average price of $2515 per ETH.

Has Ethereum's Price Peaked in This Wave?

For this epic surge of Ethereum after half a year of silence, the community has indeed gained more confidence and hope, which has also led to a revival of the entire altcoin market. However, amidst the joy, there are also voices of pessimism. Below is a summary conducted by BlockBeats based on community discussions.

The optimists point out that the current market structure is similar to the eve of the bull markets in 2016 and 2020, predicting a life-changing surge in the next 3-6 months, where some altcoins may even achieve astonishing single-day gains of up to 40%.

@liuwei16602825 stated that this surge signifies the return of the bull market as a sure thing. There is no need to worry about a pullback. The driving force behind the surge uses a high-cost isolated operation, fearing a drop more than any retail investor and will definitely do everything to support the price.

Related Reading: "Ethereum Leads the Surge Triggering the 'Altcoin Season' Speculation, How Do Traders View the Future Market?"

The bears mainly believe that this surge is different from the bull market of 2021, as the current market lacks the confidence of large-scale retail investors entering and holding positions for the long term, with funds rotating too quickly.

@market_beggar observed that a Bitfinex E/B whale has started to close positions and believes that if this whale maintains its high-speed position-closing operation for the next few days, it can be inferred that the whale no longer sees the upside potential of ETH, preparing to take profits and exit. The closing time will be a key focus going forward.

@FLS_OTC stated that there are still many uncertainties at the macro level, and the liquidity cannot support a major bull market. At this stage, it is a "last hurrah," not a complete reversal, and will continue to remain in a short position.

@off_thetarget believes that after ETH transitioned from POW to POS, it lost the "gold standard" of mining machine power cost support. The staking economic model led to a breakdown in value anchoring. Additionally, the L2 ecosystem (such as Starknet, zkSync, etc.) suffered from liquidity fragmentation, failing to establish an effective capital inflow mechanism, causing the collapse of the split disc pattern. Furthermore, the ETH community's excessive pursuit of technical narratives divorced from real-world needs resulted in a weak ecosystem growth. Therefore, he believes that ETH's intrinsic value system has crumbled, and the price is bound to plummet to the 800-1200 range, with a decisive short position at 1800.

@Airdrop_Guard, based on the core logic of the "High Probability Trading Strategy," where three sets of underlying logic different trading systems (such as volume depletion, price supply-demand, long/short position funding rate, etc.) simultaneously issue a short signal at the same point (2580), creating a high-probability trading opportunity. He emphasizes that these systems must be based on different algorithms and logics (rather than mere technical indicator overlays). The current ETH trend aligns with the short conditions in multiple independent dimensions of his trading system, hence the decision to short.

Overall, Bitcoin still maintains over 54% market dominance, and institutional funds' continued preference for it may limit the altcoin's upward potential. The market's future direction will depend on multiple factors, such as Bitcoin's price trend, global macroeconomic conditions, and whether funds can effectively rotate from Bitcoin to the altcoin sector.

Although Ethereum's recent leadership in the market has brought about optimistic sentiment, investors still need to remain rational as different sectors of altcoins are likely to show divergence in trends. Whether this round of Ethereum's rise will usher in a true altcoin frenzy may require more time and conducive conditions.

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