It was the early hours of January 18, two days before Donald Trump was set to return to the White House. Tom had just slumped into bed when his phone lit up with a message from an old friend: Had he seen? Trump just launched his own cryptocurrency.
Tom leaped to his desk, opened his laptop, and flicked on two additional monitors. “It didn’t feel real,” he says. “I was trying to wrap my head around what had happened.”
Tom leads Raydium, a peer-to-peer cryptocurrency exchange registered in the British Virgin Islands that lets people trade between coins without dealing with an intermediary. Like the rest of the Raydium staff, Tom keeps his full name and whereabouts a secret, citing privacy reasons and the threat posed by regulators.
The exchange forms part of a constellation of crypto service providers that have profited handsomely from the recent boom in memecoins, a highly volatile type of coin used almost exclusively for financial speculation. In becoming a vital part of the trading apparatus on Solana, the crypto network home to the most spirited memecoin shenanigans, the likes of Raydium have experienced violent growth over the past year. And that was before the TRUMP memecoin hit.
In 2024, Raydium processed its highest-ever amount of trading activity off the back of the memecoin frenzy. The arrival of TRUMP, Tom quickly understood, had the potential to be enormously lucrative for Raydium, which takes a small cut of every trade.
After Tom had verified that TRUMP was legitimate—not an elaborate scam, as some were speculating—he scrambled to make sure that Raydium servers could withstand the coming wave. (Amid a separate memecoin trading frenzy in late 2023, the platform fell over.) Then Tom set about making sure that there was enough of the new coin floating around on Raydium to allow people to trade it freely: He monitored how much TRUMP people had posted voluntarily—a practice that earns the supplier a cut of trading fees—and, as necessary, bought it elsewhere to meet demand on the platform himself.
At roughly 5 am, Tom fell back into bed, exhausted. In the melee, he had forgotten to purchase any TRUMP for himself.
As Tom slept, the trades piled in. The following day, on January 19, $16 billion worth of trades took place on Raydium, a greater amount than in the whole of 2023. The graph, says Tom, looked “like a hockey stick.”
Though many billions of dollars changed hands amid the orgy of trading inspired by the TRUMP memecoin, only a small minority of traders turned a profit. The vast majority either lost money or just about broke even.
The value accreted far more reliably to the Trump-affiliated company administering the coin and the crypto service providers—among them Raydium—that together make memecoin trading possible. Other components of the “memecoin industrial complex,” as a hedge fund manager once described it, include the Solana network on which the bulk of memecoin transactions take place, firms that provide wallet software for storing coins, liquidity providers that ensure coins can be traded readily, entities that aggregate pricing data, and so on. They all stand to benefit from an increase in trading activity.
“If you break it down, there are a lot of moving components in the backend that people are not necessarily cognizant of,” says Anurag Arjun, cofounder of crypto infrastructure startup Avail and Polygon, a crypto network built to rapidly process large numbers of transactions.
Until late 2023, when the first inklings of the memecoin frenzy were beginning to show, Solana was a relative ghost town. With barely anyone using the network, the services built atop it had to subsist on scraps. There remain very few Solana-based applications built for purposes other than financial speculation. “There are a lot of jokes about Solana development being like chewing glass,” says Tom. “It can be very hard.”
Memecoins have previously been scorned as unserious and therefore potentially damaging to the crypto industry as it strives for validity. The TRUMP coin in particular has been roundly criticized as a “money grab.” Yet the arrival of coins like TRUMP could have important second-order benefits to crypto networks more broadly, creating a flywheel effect whereby the arrival of memecoin gamblers attracts developers eager to build other applications for them to use. Once people are equipped with a Solana wallet, the theory goes, they are more likely to engage with Solana-based applications of all kinds—whether social platforms, games or music services—leading to a lasting increase in network activity.
“A lot of application teams will be targeting those new users,” says Arjun. “A memecoin is one example of what can run on this infrastructure.”
The TRUMP launch is also significant for what it implies about the US government’s attitude towards crypto, experts say. The industry has long complained about the absence of any explicit rules governing the issuance of new coins in the US; given that it has the president’s imprimatur, the TRUMP launch might be interpreted as tacit permission.
“This is going to create a kind of ruling that will trickle down to all the different agencies: America is embracing crypto,” says Demelza Hays, digital asset portfolio manager at investment firm Zeltner & Co and chief economist at the crypto trade publication CoinTelegraph. “I think we’re going to see [many] celebrity memecoins.”
As with the TRUMP launch, the exchanges and other components of the Solana memecoin supply chain predominantly stand to gain, not the traders.
“Trading the TRUMP memecoin is like betting on roulette. Making a bet on Solana itself is like betting on the whole casino,” says Hays. “When there is higher trading volume, we’re definitely going to see [the exchanges] do very well.”
While Raydium likely stands to profit by any potential flywheel effect created by the memecoin frenzy and embrace of crypto by the US, Tom finds himself conflicted over TRUMP.
“Raydium’s business is to facilitate volume. We try to take a very agnostic approach to the tokens available on the platform,” he says. “And having the most powerful person in the world choose Solana to launch their memecoin, whatever the pretext, is a huge indication of where Solana is right now.”
But for an industry that has long struggled to move past the stains on its reputation, Tom says, the immediate sugar high created by the TRUMP launch may not prove to be worth the negative attention the coin attracts for any losses incurred by regular investors.
“In the half-decade I’ve spent working in this space, I’ve been adamant about trying to shift the narrative away from the default: That there is a lot of grift and nefarious activity that happens within crypto,” says Tom. “I’m very conscious of that reputation.”
Two days after TRUMP began to trade, first lady Melania Trump launched a memecoin of her own. Its critics voiced a similar chorus of concerns related to alleged conflicts of interest.
The White House did not respond to a request for comment. A request delivered to an email listed on the website for the MELANIA memecoin went unanswered.
The day of the TRUMP launch was a thrill, but now Tom felt deflated. “I was like: This doesn’t feel as good as it did yesterday,” he says. “I definitely did not buy any MELANIA.”