I Only Play $100K Market Cap Meme Coins, Earning $80K/Month

“I quit my job a few months ago to go full-time into meme coins,” said Mike (a pseudonym), a meme coin player, to Coindarwin. Four months ago, the meme coin BOME on Solana caught the attention of many crypto newbies by achieving a market cap exceeding $1.5 billion within three days, with a gain of over a hundredfold. Mike was among them.

“When I started playing meme coins, I had around thirty to forty thousand in my wallet. I haven’t added any more money in the past few months, and I make about seventy to eighty thousand yuan a month.”

Many people are in a similar state to Mike, trading only meme coins and spending almost 24 hours on-chain, waiting for an entry opportunity that lasts only three minutes, with holding times usually measured in minutes.

Most of the tokens they trade come from the Solana token issuance platform Pump.fun. Over the past few months, Pump.fun has maintained an average daily income of over $600,000, with over ten thousand new tokens appearing on Pump.fun every day. Many people navigate through the fragmented liquidity, seeking stage-specific returns in various ways.

$500K Cap, Only Playing Small

Four months ago, if a meme coin on Ethereum had a market cap below $1 million, most people would speculate that the token’s consensus was loose and the team too “amateurish” to dare to invest. But on Solana, the cost and time to build a consensus that can make money are much smaller, so the difference between hunters and prey is just a matter of minutes.

3 Minutes, From Hunter to Prey

John (a pseudonym), who has been intensely involved in meme coins for less than a year, already feels “behind.” “Someone in the group asked what uni was. My first reaction was Uniswap, but actually, everyone was talking about Unibot.”

General traders, after seeing a token contract, need to copy it to a charting tool for analysis before deciding whether to buy. For meme players, this process takes minutes. When a token’s “buy signal” appears, ten minutes have already passed, so one must be wary of the imminent “trap moment.”

The principle of quick in and out is simple. Players believe that meme coins with upward potential must go through the pump phase. To get cheap chips early, you need to get in before others. Entering a few minutes later can mean a buy price several times higher. If you’re only making a small profit, it’s okay, but most of the time, entering three minutes late could mean “buying at the top.”

For example, this meme coin CLOWN showed signs of an uptick before 01:20, then rose more than four times in the next ten minutes before falling back to its initial position. The token contract sent to the group has already gone through monitoring tools releasing signals, followed by tracking hunters capturing information and entering, and then group members discovering and sharing it. When traders see it, they still need to go through selecting the contract, analyzing it with charting tools, and placing an order. A few minutes’ difference in entry time can turn a double into a loss.

Finding Tenfold Gains in Small Caps

The quick in-and-out strategy stems from meme players’ conservative estimates of market cap, which is the game rule of the meme market. In some Telegram groups sharing meme coins, the group members range from a few hundred to a few thousand. As long as a meme coin’s market cap can be raised from under $100K to several hundred K, early big holders can make enough profit.

Traders need to analyze their position in the “market.” Latecomers entering at $100K-$200K can also see returns of several times. $500K is considered a “trap position” by many meme players, and $600K is seen as “a bit high.” Beyond that, more definite signals are needed to “hold.”

The generally low market cap in meme markets has another reason: the participants’ principal amounts are not very high. After talking with several meme players, Coindarwin found that many players’ principal amounts are around 3-5 SOL, trading a maximum of two tokens simultaneously, with each trade ranging from 0.5 SOL to 2 SOL. “I feel that when the big market is not doing well, the meme market tends to be more active,” Mike said.

Ever-Maturing Tools

Tokens with definite pump expectations often need to be grabbed at their bottom market cap. For credibility, meme coins posted in group chats often have a market cap of over $100K, but real high multiples must be entered at tens of K.

“You can’t make money waiting for others to post in the group,” said Lucy (a pseudonym). Group messages are only auxiliary references; proactive monitoring ensures initiative. Coindarwin found that frequent meme players often use two or three tools simultaneously, with GMGN, NFT Sniper (also known as abot), and Bullx being the most common.

Viewing token trends is just the basic function of these tools. Preparing for meme trading can be divided into “finding coins from people” and “finding people from coins.” Some tools are better at dashboards and analyzing chip distribution, others excel in alerting address movements, and some perform better in trading speed.

Knowing how to use these tools is just the first step. Finding smart money and sniper tools that suit you is the most important.

GMGN and NFT Sniper have outstanding advantages in viewing the chip distribution of stakeholders. GMGN is relatively newbie-friendly, showing indicators like devs, early buyers, big holders, smart money, and KOLs, and allowing users to create a watchlist of wallets. In the “finding coins from people” stage, both GMGN and NFT Sniper offer on-chain activity alerts. Users add addresses they want to monitor to the watchlist, and when these addresses make transactions, users receive alerts on the web or via a mobile tgbot, getting the information first-hand.

Meme player Tom (a pseudonym) maintains a smart money list with friends. When new signals appear, Tom checks how many watched wallets are on board, using GMGN to review the historical trades of top addresses to decide whether to buy. When signals are frequent, John checks NFT Sniper first. The few icons on NFT Sniper’s interface make information gathering more convenient, with more refined auto-trading strategies.

Apart from equipping appropriate tools from these angles, traders seeking alpha signals do not rely solely on smart money’s instructions but actively find new coins earlier, such as those still in the internal market. The internal market refers to new coins on Pump.fun with a market cap below 67.8K before liquidity shifts to Raydium. Most new coins don’t fill the internal market, but some with “signals” do.

In these coins, meme players assume they are competing with the market maker for chips and use the term “stuffing” to refer to buying in. This provides a faster discovery speed. Lucy prefers using Bullx, “The experience of monitoring new coins is great, and trading is fast.”

GMGN, NFT Sniper, and Bullx have overlapping functions and different strengths. Meme players frequently discuss their user experiences and compare their reaction speeds in the community. Mastering the use of meme tools is the first step in becoming proficient at meme trading.

Devs Must Rug, But Devs Are Still Needed

To win in trading, the most important thing is to understand who your counterpart is and to anticipate their actions as much as possible. In the meme market, the role of the counterpart has undergone several transitions, from devs to “CTO teams,” from “conspiracy groups” to smart money.

CTO Becomes Consensus

As early as the end of last year, during the meme season on the Solana ecosystem, the community discussed the dev rug traps in meme coins. After a token rises, devs can withdraw liquidity or sell tokens acquired at extremely low costs, taking away all the liquidity from those who bought in, leaving a “headless” price chart.

At that time, the main charting tool was birdeye, which could only differentiate traders by three different transaction volumes, leaving the dev team hidden. However, with the emergence of on-chain tracking tools like GMGN and NFT Sniper, this situation has completely changed. Both can openly display the chip distribution of devs and early traders.

Issuing a coin on Pump.fun costs only 0.02 SOL, and once the token hits the external market, the dev can reap several times the return. Now, having open signals adds an extra layer of security. Several meme players told Coindarwin that not buying meme coins where “the dev is still on board” is one of their trading principles. “The developer is like a time bomb. My habit is if I see the dev is still there, I don’t buy. I wait for the dev sell signal before considering an entry,” Mike told Coindarwin.

Thus, most meme coins only rise after the dev sells. When Jiawei first started using GMGN, he noticed that many meme coins’ devs would sell at the opening, completely missing out on the subsequent gains. For example, DLORF and OOO rose significantly, with gains of several tens of times, ten minutes and one hour respectively after the dev sold all their tokens.

But dev sell can only be considered a signal to exclude a hazard. The meme coins that can rise mostly involve the “CTO” phase.

CTO: Community Takeover

CTO stands for Community Takeover, referring to situations where the original developers abandon the project and the user community takes over. After a crypto project undergoes a CTO, for retail investors, it means eliminating the risk of developer rug pulls and having the community lead the project development. An example might be the disappearance of Satoshi and the subsequent rise of Bitcoin, which could be seen as the classic CTO model.

In the meme market, CTO is manifested by teams buying out rugged meme coins and continuously operating the meme coin community on Twitter and Telegram. “For a while, picking up coins that were CTO after devs rugging would yield decent returns,” Tom recalled. “When a token was CTO, I would enter the Telegram group organized by the team to check the community atmosphere. Judging the potential for a token’s rise involved seeing if the team played music, how high-spirited the conversations were, and whether they paid for updates on the dex.”

But not all CTO meme coins can be trusted. Tom’s perspective on CTO has shifted from gauging community atmosphere to analyzing chip distribution.

10-Second Entry, Team Manipulation

Now, the CTO process has become a standard part of the meme coin lifecycle, with all meme coins learning to promote this selling point. GMGN has marked tokens with a “CTO takeover” label, and most meme coins on the hot list have a CTO label, even if the coin has only been online for less than an hour.

For instance, with MARU, the dev bought in shortly after the token launched but sold all within 27 seconds, earning only 0.01 SOL (about $2.08) from a 5 SOL investment. After the dev sold, MARU began to rise, gaining 20 times within 50 minutes.

Are there really so many reactive and effective CTO teams? “Most CTOs are self-directed and self-acted, which is already common knowledge in meme trading,” Tom said. Coindarwin interviewed several meme players and found that they were all well-versed in the CTO routine. Some teams claim to be the “GME CTO team,” while others are “speedy CTOs,” where the dev sells for a profit and then CTOs in place for another round of gains.

Using MARU as an example again, within 10 seconds after the dev sold, several addresses quickly bought in, becoming major holders. They collectively sold after reaching a profit rate of 20-40 times, causing the MARU price to drop by 52% in 7 minutes. The community largely sees this as the dev team manipulating under the guise of a CTO.

Meme players have developed countermeasures. The profitability of major holders is a key indicator for meme players. “If you encounter a major holder entering early, you can try to follow them. If they’ve made too much profit, you need to be cautious,” Jiawei said. Tom has adjusted his strategy, “Now, if I see a good opportunity, even if the dev is still on board, I’ll follow.”

Milady Cabals and Conspiracy Groups

The logic of CTO has shifted from “community governance” to “switching from individual manipulation to group manipulation,” bringing back hidden rug risks to the attention of retail investors. However, for experienced meme traders, this process presents opportunities for profit through strategy. Milady cabals (Milady Conspiracy Groups) was the first “jargon” Jiawei learned when he started meme trading.

Searching “Milady cabals” on Twitter shows many discussions, initially focused at the end of May. “For a while, when a KOL with a Milady avatar called for a buy on Twitter, several others with Milady avatars would quickly retweet. The meme coins they called for had very high market caps,” Mike recalled.

So, activating notifications for these people’s Twitter accounts and monitoring their on-chain addresses became a crucial strategy for meme players during that time. This discovery was so popular that Pump.fun’s official account even played along, saying, “Already in 13 Milady Conspiracy Groups, I’m serious.”

Yesterday, FWOG, originally not favored due to being a clone coin, achieved a 50x increase in 7 hours with a trading volume exceeding $60 million. Its CTO team caller, @deecayz, has a Milady avatar on Twitter, showcasing two previously successful meme coins in his bio.

When FWOG reached its peak, the top three holders of FWOG cashed out for profit, causing the token to plummet 73% in a short time, as analyzed by on-chain monitor ai_9684xtpa. This didn’t affect deecayz’s record, with “FWOG” becoming his third successful project.

But Milady is not the only standard for judging “conspiracy groups.” For meme players, any team that pre-stocks a large amount of low-priced chips, promotes a meme coin, and then sells at a high price is considered a “conspiracy group.” Meme players constantly look for new counterpart organizations. “Now, I only occasionally check those few Milady accounts. I’ve already cleaned out my watchlist,” Lucy said.

Stay at the Table

Even with multiple successful experiences, Mike still spends up to ten hours a day watching the market. “Most of the time it’s tedious, but often the more tedious it is, the more you should wait for that seemingly inexplicable opportunity.”

Following Trades Might Be Pseudo-Smart Money

Players who can consistently make money on memes believe that trading signals are actively crafted from the vast flow of information and will not wait for a wealth code to just fall into their lap.

As more people learn to track KOL addresses and smart money addresses marked by public tools, making money requires stronger information analysis skills. “Following trades is getting harder,” Mike said. The true wealth code is always in a Schrödinger’s state.

Many obstacles lie between players and real smart money. First is on-chain noise; many people look for smart money addresses among those with high single-coin win rates. However, from the smart money perspective, they don’t need to make tenfold or even hundredfold returns on every investment. As long as they have enough trades and capital, even a 20% profit can accumulate substantial returns. “Not all who buy at low points are smart money; those pursuing long-term returns don’t want to be discovered by the market,” Tom said.

Second is the failure of information asymmetry. If the market is small and smart money buys in, the price will immediately rise several times. Blindly following trades only makes oneself the exit liquidity for smart money. Crypto KOL 0xSun recently wrote a post from the “followed perspective,” highlighting this issue.

Moreover, information asymmetry only works in a small scope. Retail investors want to follow “insider trades,” but manipulators use various methods like washing trades, killing followers, and creating matrix addresses to squeeze retail investors out of low-priced chips.

Recently, KOL “Wang Xiaoer,” who made significant profits on meme coins, urged his followers on Twitter not to follow his trades. He explained that he prefers picking up extremely low-market-cap meme coins that have been out for many days, but “following this strategy is meaningless after being followed.” This can be seen as evidence that the information asymmetry benefits of smart money are decreasing amid the following trend.

Many players Coindarwin spoke to also realized this point. “Addresses followed by many people have little value; you need to keep finding new wallets to survive,” Mike, Lucy, and Tom all spend a lot of effort maintaining their watchlist of addresses.

Periodically Ineffective Strategies

If one were to summarize a universal meme strategy, it would be “respect experience, but experience will quickly become ineffective.”

For example, trading memes around Trump news used to be a highly profitable wealth code but has now been largely exhausted.

On the day Trump was reportedly assassinated, Mike was acting as a groomsman for a friend. “I got up very early that day, and after seeing the Trump assassination news, my first reaction was to find related meme coins. I didn’t have time to watch the market, so I bought many coins in one go.” Among the coins Mike bought, EAR achieved an 80x increase within 7 hours of its launch. “I sold all the way up but still made a decent profit.”

“Attention is the most important thing. Whenever there is news about Trump, there will definitely be related coins.” Since then, Mike formed this judgment. A few days ago, when Trump, as the first former U.S. president, gave a speech at the Bitcoin 2024 conference in Nashville, meme players from postponing attendance to squatting throughout the event were searching for bet targets among various keyword tokens popping up on Pump.fun in real-time. However, among dozens of related meme coins, none exceeded a market cap of 500K.

That day, the owner of Dogecoin’s prototype Shiba Inu, Kabosu, showcased her new pet on Twitter, named NEIRO in English. Just as Trump’s speech ended, the meme coin Neiro had already attracted $50 million in trading volume. “I didn’t expect the dog to beat Trump,” meme players who missed out joked in the group.

If one uses KOL address movements as the main signal, they would have been completely confused during the meme coin “Neiro” and “NEIRO” battle that day. NFT Sniper showed that 31 KOL addresses traded Neiro, and 28 traded NEIRO. Looking back, many KOLs also “miscalculated.”

The aforementioned Milady avatar KOL deecayz, who pushed the 50x FWOG, CTO-ed three meme coins to the community the day before, among which the meme coin BEIRO, whose contract address was clearly released, failed to exceed a market cap of 30K.

Nothing New in Memes

For Zhang Ran (alias), who entered the crypto industry a few years ago, “the evolution process of the meme market is the same as the ICO years ago, nothing new.”

After the crazy bubble of ICOs, the crypto industry spent a few years exploring new narratives like NFT and DeFi, forming investment perspectives in segmented directions such as cross-chain interoperability, scaling L2, and RWA. But now, mainstream crypto investors mock themselves with phrases like “value investing leads nowhere, YOLO MEME and live in a palace.”

Even with a lot of time spent, most meme players still have a low win rate. “Small losses, big gains” is the ideal settlement outcome for meme players. “On one hand, you need to stay cautious and remain at the table, and on the other hand, you need to seize opportunities to be a hunter.”

Coindarwin found that many players in the meme community only started learning about cryptocurrency during the hot Bitcoin inscription period at the end of last year. Three months ago, BOME and SLERF solidified their choice of the meme market. When asked if they would explore and participate in other crypto fields outside of memes, Mike replied, “We’re not newbies or greenhorns anymore.” Tom said, “The purpose of creating an investment portfolio is to hedge risks. I try to avoid blind betting, so with limited energy, I won’t participate.”