The "head effect" is gradually becoming the core driving force of traffic and capital, especially as the synergy between platforms and tools further amplifies the market influence of the head, making it a key variable in the flow of funds and emotional fluctuations.

Written by: Nancy, PANews

Recently, the sentiment in the MEME market has gradually warmed up, particularly driven by several "golden dog" projects, leading to a significant increase in overall market activity. However, the MEME ecosystem is still in the early stages of recovery, and capital confidence has not fully restored. Meanwhile, in the context of insufficient liquidity and high sensitivity to emotions, the head effect is gradually becoming the core driving force of traffic and capital, especially as the synergy between platforms and tools further amplifies the market influence of the head, making it a key variable in the flow of funds and emotional fluctuations.

Launchpad: Significant Head Effect Driving Emerging Platforms

Although the MEME market has shown signs of recovery, in terms of the number of tokens created and user activity, there is still a considerable gap from historical highs.

Taking the current main launchpad for MEME coins, Pump.fun, as an example, according to Dune data, as of May 7, the platform's daily token creation volume has exceeded 33,000, an increase of 48.6% compared to the previous low period (about 17,000), but still only 47.5% of the historical peak. In terms of token graduation rates, it has currently rebounded to 0.81%, showing significant improvement from the lowest point, but still has a considerable gap from the historical high of 1.67%. Regarding user activity, Pump.fun currently has 199,000 daily active wallets, rebounding 55.1% from last month's low, but only 46.9% of the historical peak (about 424,000). Notably, from the perspective of new users, the current daily new wallets are about 94,000, which is still limited compared to the historical peak of over 216,000. This indicates that although the MEME heat has clearly warmed up in the short term, overall user participation and liquidity breadth have not fully recovered.

However, some emerging token launch platforms have rapidly expanded by leveraging the head effect. For example, the recently popular Boop has successfully utilized the head effect to achieve user growth and market capitalization surge in a short period through KOL-driven FOMO effects, platform incentive mechanisms, and precise market rhythm control. However, this approach also faces challenges such as short-term retention issues brought by KOL airdrops and competitive pressure from rivals potentially replicating strategies.

It is worth mentioning that several recently hyped "golden dog" projects have demonstrated a significant head effect, where high-influence figures such as KOLs and large holders drive traffic and capital inflow, creating a snowball effect that further amplifies the narrative value of the tokens. For instance, large holders collectively pushed the market cap of Fartcoin to break $1 billion, and House gained momentum with well-known KOLs like ansem and him. In contrast, recent MEME coins that relied on event-driven or grassroots narratives, although able to attract short-term attention, struggled to sustain the conversion of traffic into effective capital inflow, leading to a rapid decline in popularity.

Trading Bots: Trading Volume Rebounds, Still Down Nearly 90% from Peak

Trading bots are gradually becoming an important tool for on-chain users to enhance trading efficiency, and have recently rebounded with the warming market sentiment. Dune data shows that as of May 6, the daily trading volume of trading bots reached $85.37 million, with daily users exceeding 57,000, marking increases of nearly 64.1% and 43.8% from recent lows, respectively. However, compared to the peak in January, daily trading volume and daily users are still down 89.1% and 62.5%, respectively.

For ordinary retail investors, the features of trading bots such as smart money tracking, automated following, and on-chain data analysis enable them to monitor and quickly capture dynamics of KOLs and large holders in an information-asymmetric market environment, thereby effectively enhancing participation efficiency and reducing PVP risks.

At the same time, retail investors often hold a high level of trust in these trading bots recommended or used by heads, and this endorsement effect significantly enhances the market acceptance and activity of the relevant bots. Of course, heads, due to their capital size and market appeal, are more inclined to use tools that are easy to operate, execute quickly, and have high success rates to ensure trading efficiency and maximize returns. Therefore, whether trading bots can meet the demands in terms of functionality diversification, safety, or response speed is a core factor influencing the willingness of heads to use them. Additionally, the potential risk of some heads manipulating the market through bots cannot be ruled out.

For example, the recently emerged Axiom has quickly gained favor among MEME players due to its advantages in complex strategy support, efficient trade execution, and user-friendly design, particularly meeting the core needs of heads (KOLs/large holders), thus rapidly rising to become a leader in the trading bot sector in a short period.

DEX: MEME Revenue Plummets, PumpSwap Shows Initial Advantages

MEME remains one of the core sources of DEX revenue. Taking Raydium as an example, Blockworks data shows that in the past 30 days, the daily revenue from MEME-related transactions accounted for as much as 86.8%, while the daily revenue from MEME token issuance reached 93.5%, highlighting its dominant position in the platform's overall revenue structure.

However, the revenue generated by MEME is experiencing a significant decline. Blockworks data shows that as of May 6, Raydium's daily trading revenue from MEME was only $156,000, a drop of over 97% compared to the peak of $5.244 million in January. Meanwhile, the daily revenue from MEME token issuance has also fallen from a high of $149,000 to just $19,000, demonstrating the rapid cooling of market enthusiasm and a clear retreat of user speculative sentiment.

In contrast, PumpSwap has shown strong development momentum. Dune data indicates that since its launch on March 20, the platform has accumulated a trading volume of $17.67 billion, and has shown a significant upward trend since early April, with a single-day trading volume exceeding $670 million. At the same time, the platform's user activity has also continued to rise, quickly attracting a large number of new users during the cold start phase, followed by a gradual increase in the proportion of returning users, indicating strong user retention capability. Notably, in early May, the number of daily active wallets once exceeded 450,000. As of May 7, PumpSwap has accounted for 12.7% of the total trading volume on Solana DEX, establishing an initial competitive advantage in the ecosystem.

In this process, the role of large holders/KOLs cannot be ignored, as they not only significantly drive the growth of MEME trading volume but also facilitate the rapid expansion of liquidity pools and the concentrated influx of new users, becoming the core driving factor for the platform's short-term explosion.

Wallets: Activity Rebounds, Down Over 80% from January Peak

The usage of wallets is also an important indicator reflecting on-chain sentiment. Dune data shows that as of May 5, the weekly trading volume of mainstream wallets reached over $460 million, rebounding 35.2% from recent lows, but only 51.6% of this year's peak (about $950 million). Meanwhile, the number of weekly active addresses reached 17,000, significantly down over 80.4% from the peak of 87,000 in January. This indicates that although trading volume has rebounded, user participation remains sluggish, and overall on-chain activity is still in the early stages of recovery, with market sentiment not yet fully warmed up.

Similarly, the attractiveness and user stickiness of wallets depend on core factors such as the completeness of their functions, the breadth of usage scenarios, and their ability to integrate into the ecosystem. For example, wallets with high market shares like OKX Web3 Wallet and Binance Wallet have successfully attracted a large number of MEME players, becoming mainstream choices in this niche. In this process, the usage rate and word-of-mouth effect of large holders and KOLs have also played a key role, significantly enhancing the visibility of wallets and increasing ordinary users' trust and willingness to use them.

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