3 years is a long time in the crypto market and that’s about how long the Bonding Curve model has left before it goes out of style. With the advent of newer, innovative launch mechanisms, the Bonding Curve model appears to be coming to an end.
The path of the connection curve
It all started with friend.tech, a model that demonstrated how tokens were just mathematical constructs where buying and selling were two key pillars of liquidity control. She was a pioneer in introducing the concept of splits based on key opinion leaders (KOLs). Although innovative, the concept had scalability issues due to a cap on key distribution. This was one of the biggest challenges faced by the linkage curve model.
Obstacles encountered by the linkage curve model
One of the major challenges faced by the binding curve model is the aforementioned cap on key distribution, which results in a scalability challenge. The population cap causes growth to stagnate, making it impossible for the bond curve model to maintain rising price momentum.
The emergence of Pump.fun
As ami.tech encountered the challenge of liquidity, Pompe.fun emerged to address the challenge by providing a pathway to liquidity from the inception of the project through low liquidity AMM markets to centralized exchanges.
Pump.fun and its forks have continued to rely on innovation, with the aim of eliminating the liquidity problem. But ultimately, all of these models use the bond curve model, which leads to the following challenges:
Poor success of the transition to DEXs: Only a small fraction (around 1%) of tokens launched on bonding curves manage to successfully integrate into decentralized exchanges. This often leads to significant user losses, amplified by the dominance of bot activity during trading.
Early dumping creates strong selling pressure: Late investors often suffer losses when early participants cash out, creating strong selling pressure that destabilizes the token’s market cap.
Lack of sustainable incentives: Linkage curve models often fail to reward participants who actively contribute to price stability, leading to reduced community participation and weaker price support mechanisms.
Honeypot Finance as an alternative to the bonding curve
Since the launch of the FTO (fair token offering) model in January 2024, Financing honeypots has positioned itself as Berachain’s PoL accelerator. It is this FTO template that has been tweaked to reveal the new meme launch template called pot2pump. Pot2pump aims to solve bond curve issues. Just like pot2pump, there are a few other protocols including daos.fun that take the route of fair launch followed by adding to the DEX to address the liquidity challenge.
With models like pot2pump pioneering a meme launch environment with abundant liquidity, pots appear to be in complete control.
Main reasons why pots seem to be under control
Of all the models seeking to solve the bond curve problems, pots seem to have an advantage. Here’s why:
- Innovative incentive framework: Pot2Pump allows pots to award up to $4 million in rewards to our community, creating a strong incentive structure for participants.
- Risk-free participation: If the launch does not reach the $20,000 threshold, users can refund their contributions at any time, ensuring zero financial loss.
- Maximized liquidity opportunities: With 100% deep liquidity established in the pool and proof of liquidity, users can earn returns in multiple ways by becoming Liquidity Providers (LPs).
- Pioneering liquidity management: First, liquidity is integrated into a concentrated liquidity pool, using an advanced automatic liquidity management strategy (an upcoming feature).
But how does pot2pump enable 100% liquidity? It does this by fairly establishing a 100% deep liquidity pool in HenloDex right after launch, naturally making participants liquidity providers.
Additionally, the Pot2Pump model introduces an innovative approach by adding liquidity to concentrated liquidity pools and leveraging an advanced vault-based on-chain strategy for automated price range management. This strategy not only has the potential to generate over 500% long-term returns, but also offers the opportunity to earn BGT emissions, creating a sustainable and rewarding ecosystem for participants.
Making RWA Great Again
It is not very common for a memecoin launch model to be associated with RWAs. But with growing discussions about pot2pump being the go-to launch mechanism for memes, a new perspective is emerging: a good memecoin on Pot2Pump is the RWA of these real PFP and Pop culture trends, as it could be used to map the real-world IP and generate long-term returns on-chain.
What fuels this perspective? So far, only large institutions like Sony and Disney own their intellectual property, benefit from IP protection, and have the opportunity to generate a long-term return by owning that intellectual property.
But with GenZ creators having the ability to produce and distribute much more interesting “IP” and distribute it for free through platforms like TikTok, finding a way to monetize these IPs could be a game-changer.
How can Pot2Pump turn memes into powerful RWA?
The answer to this question lies in the uses of the pot2pump model as a meme-launching environment. He can do this by:
- Strongly incentivize someone who discovered the ticker
- Fair Distribution of LP Tokens and Full Refund Policy: During the pot phase, users receive LP tokens fairly and a 100% deep liquidity pool is established when the market cap reaches $20,000, marking a successful launch. If the $20,000 threshold is not reached, users receive a full refund without any losses. This approach ensures that liquidity is systematically directed to strong token deployers, avoiding weak projects, and allows for faster and more efficient liquidity distribution.
- Maximize Returns with Dex Integration: Users receive LP positions that are seamlessly added to concentrated liquidity pools. With an advanced spread management strategy, this setup optimizes transaction fee generation and opens opportunities to earn additional protocol yields. Additionally, users will also benefit from the ability to earn issuance of BGT (Berachain’s governance token), thereby improving overall profitability.
The third point is where the real deal lies. The pot2pump model turns early participants into liquidity providers, helping them generate long-term returns. With each participant sharing the IP and unlocking long-term returns, pot2pump becomes a natural mechanism for turning memes into RWA.
Gerd Altmann Since Pixabay