The mystery of $MELANIA
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Last week, we wrote a news story on mainFT about $MELANIA, the memecoin launched by Melania Trump 43 hours after her husband — the leader of the free world — released the official $TRUMP token.
We identified 24 wallets that bought $MELANIA in the minutes before the existence of the coin and its backing from the first lady was publicised (via Melania’s Truth Social account, naturally). These people — who knew where to get the coins and were apparently confident it was not one of the hundreds of unofficial Trump family coins — bought $2.6mn of the tokens and flipped them within days for about $100mn.
As many FT readers clocked, this is not exactly how a normal float should work. Memecoins are an arena with all the accoutrements and vocabulary of finance but lacking even the level of regulation that governs the sale of Beanie Babies.
Hayden Davis, an organiser of $MELANIA, told YouTube journalist Coffeezilla that there had been no profit-taking by the team behind the coin. Davis has not responded to our requests for comment, having found himself enmeshed in the $LIBRA coin scandal — a memecoin that surged and crashed following an endorsement from Argentina’s president Javier Milei.
The reason this is so insanely lucrative is that unlike a float of shares, memecoins are initially priced close to zero dollars and allowed to find their price. There is a logic to this: there is, after all, no priceable income flow behind them and the marginal cost of minting a token is zero.
But the law of multiples means if you can get in early on a coin that you expect to attract attention, you can make a lot of money. We found one buyer who rode a 64-times increase by buying at an average of $0.13 per coin (before the public launch) and selling at an average of $8.34. Good luck getting those kinds of gains in a post-IPO pop.
This is why memecoins are beset by so-called “snipers”: people who buy early, then dump their coins back into the market when the price is higher. As Davis said:
Every single one of these launches, that’s what happens — where it’s like three to ten guys get these massive chunks… just looking to unload their whole position …Every launch this happens.
It is worth highlighting one memecoin where the launch seemed to conform more to conventional financial market practice: that of noted rule-respecter and upholder-of-norms Donald J. Trump. (Side note: the amount the entities behind the $TRUMP coin have already made that we can verify is $350mn — almost enough to pay for a Qatari “sky palace”.)
As we reported, no one was allowed to buy $TRUMP pre-launch.
The $TRUMP team is opaque — Davis is certainly not involved, and they haven’t given any interviews. It does bear stating that creating a mechanism by which people can wire the US president gobs of cash anonymously using crypto creates horrific ethics and enforcement problems (big holders of the coin can now get to meet the president).
But the organisers do seem to have run things by some sort of a book:
Those selling patterns are just one of the ways that the $MELANIA token, for all that it may appear to be a rerun of the same playbook as $TRUMP, shows a remarkably different degree of planning and organisation.
For example, the domain gettrumpmemes.com, used to promote $TRUMP, was registered almost one month before the launch, which suggests its creators were carefully planning ahead, preparing for a memecoin weeks before Trump was inaugurated. In contrast, the melaniameme.com website was only registered one day before the $MELANIA launch (on the very same day as the $TRUMP launch).
When you look at the way the launches were executed, you get a sense of just how rushed the $MELANIA launch was. The $TRUMP token was “minted” and a liquidity pool (a sort-of automated marketplace) for selling the initial distribution was capitalised eleven hours before the token was launched (by a post on Truth Social from Donald Trump’s official account). Everything was set up and parked comfortably ahead of a pre-planned launch time.
With $MELANIA, the token was minted only 78 minutes before the announcement, and the liquidity pool capitalised 44 minutes before.
In both cases one billion tokens were minted, with 20 per cent earmarked for the initial sales and 80 per cent set aside for future release. We can see, in the case of $TRUMP, that the 800mn were quickly transferred to a single reserve account. You can find them easily on the blockchain.
For reference, here is one of our rough sketches of how the $TRUMP distribution happened (we’ve taken the names off but you can see the shape).
In the case of $MELANIA, things are… more complicated. The tokens are scattered around a variety of accounts. It’s all a lot less easy to audit and trace. Here is the equivalent doodle of the structure. Don’t worry too much about what the things are, just look at the number of things:
You can only tell so much from the blockchain data. But it does appear to have been pulled together very fast. How the $MELANIA coin came to be approved and launched by this team in this rush — and how Davis et al got involved with the incoming first lady — is something we’d love to find out.
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