Nansen CEO’s Memecoin Token $IQ Hits $6M Market Cap in 24 Hours – How MakeNowMeme and Pump.Fun Enable Quick Profits and Rug Pulls

Nansen CEO's Memecoin Launch: The Rise and Fall of IQ

Alex Svanevik, CEO of the on-chain analytics platform Nansen, recently made waves in the crypto world with the launch of a new Solana-based memecoin named IQ.

The token experienced an explosive surge, reaching a remarkable market capitalisation of $6 million within just a day of its launch but has now fallen to near $1 million.

As of this writing, IQ is priced at $$0.0009628 USD and 0.000005734 SOL, showing a downward trend.

On social media platform X, Svanevik hinted at the experimental nature of this launch, stating,

"testing some tech a friend built! don't ape this thing god**mnit 🙈"

The term "aping" refers to the impulsive purchase of a cryptocurrency without thorough research, reflecting Svanevik's cautionary stance on the speculative nature of the investment.

MakeNowMeme – A New Tool for Memecoin Creation

Svanevik's venture into memecoins was facilitated through MakeNowMeme, a novel platform that simplifies the process of launching a new memecoin.

This service allows users to create a memecoin by posting a tweet with text formatted in a specific way.

Unlike traditional methods that require complex coding and initial liquidity, MakeNowMeme streamlines the creation process, making it accessible even to those with minimal technical expertise.

Much like its counterpart Pump.Fun, MakeNowMeme ensures that once enough users purchase a newly created token, its liquidity is added to the decentralised exchange Raydium before being burned.

This mechanism aims to foster initial trading activity and create a temporary liquidity pool.

Pump.Fun's Role in the Memecoin Surge

Pump.Fun has played a pivotal role in the memecoin explosion, significantly impacting the decentralised finance (DeFi) sector.

Since its inception earlier this year, the platform has facilitated the creation of over 1.5 million memecoins.

This user-friendly interface allows individuals to launch tokens with ease, requiring only a minimal fee and no initial liquidity.

These tokens initially trade along a bonding curve, and once they reach a market capitalisation of around $75,000, the bonding curve is burned, stabilising the liquidity pool.

Pump.Fun generates revenue through a 1% fee on transactions, but this fee ceases once the token’s liquidity is burned.

The success of Pump.Fun is evident from its recent financial performance.

The platform posted $2.31 million in fees over the past 24 hours, surpassing Ethereum’s $2.29 million.

This surge has positioned Pump.Fun as a leader in DeFi revenue generation, with an annualised revenue projection of $315 million based on an average daily revenue of $906,160 over the past week.

The platform’s role in the current memecoin frenzy is underlined by its dominance in the creation of new tokens, with Solana-based memecoins making up 85% of all newly created tokens on decentralised exchanges.

The Memecoin Frenzy: Opportunities and Pitfalls

The recent memecoin craze has led to significant financial gains for some, but it has also resulted in substantial losses for others.

The rapid influx of new tokens, many of which lack intrinsic value and practical application, has drawn both excitement and skepticism.

Solana, in particular, has seen a surge in memecoin activity, with thousands of new tokens and billions in trading volume over the past month.

This trend has mirrored the ICO boom of 2017, where the Ethereum network faced a similar influx of speculative tokens.

The current memecoin frenzy on Solana has also seen political-themed tokens, such as KAMA, a memecoin inspired by Vice President Kamala Harris, which surged by 3,875% since its launch, reflecting her increasing prominence in the political landscape.

The Dark Side of Memecoins: Rug Pulls and Scams

Despite the opportunities, the memecoin market is fraught with risks.

Many new memecoin projects are plagued by rug pulls—exit scams where developers abandon the project and steal the funds raised from investors.

This issue has been highlighted by recent developments, including the case of the Solana-based memecoin Neiro.

The developer behind Neiro initially invested just 3 SOL (approximately $552) to acquire 97.5 million tokens.

Subsequently, he sold 68 million tokens for 15,511 SOL ($2.85 million) and sent 10 million tokens to a dead wallet, leaving a remaining 19.5 million tokens valued at around $1.8 million.

Neiro isn’t his first “venture”.

This developer has created at least 47 rug pull projects using the Pump.fun platform to quickly earn $6 million in profits.

The rise of memecoins, while exhilarating for some, underscores the speculative and often deceptive nature of this segment of the crypto market.

The combination of high volatility, lack of utility, and the prevalence of scams highlights the need for caution and due diligence in navigating the memecoin landscape.

Navigating the Memecoin Minefield

The ease of launching memecoins through platforms like MakeNowMeme and Pump.Fun has undeniably democratised access to creating new projects.

However, this simplicity also accelerates the proliferation of rug pulls and speculative ventures aimed at quick profits.

While these tools can empower genuine innovators and enthusiasts to build engaging or meaningful projects, the decentralised nature of these platforms inherently makes investor protection challenging.

As memecoin investments increasingly resemble high-stakes gambling, the onus remains on investors to exercise discernment, invest only what they can afford to lose, and remain vigilant in a landscape rife with volatility and deception.