From FTO to Pot2Pump: How Honeypot Finance Created a Fairer, More Exciting Meme Launch Mode than Pump.Fun

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Meme tokens are one of the hottest topics right now. The meme token launch market alone is estimated to have a market cap of around $500 million. Berachain, a chain designed for meme tokens, boasts an incredible cult following. Despite being in its pre-inception phase, a multitude of new and unique memes continue to come to the fore, across formats.

Naturally, with this rise in popularity, meme launchpads have emerged as a key space for innovation. Among these platforms, Pump.Fun has attracted attention with its use of a bonding curve model, transitioning to a DEX when a minimum market cap is reached.

Through its Bonding Curve model. Pump.fun has launched over 2 million tokens so far, generating a whopping $105 million in revenue. The mechanism uses a two-phase launch system that increases token prices gradually through a bonding curve before moving to a DEX. This innovative approach helps in dealing with a significant price slump post TGE. However, like any other launchpad, Pump.fun has its own set of challenges. Here are a few notable drawbacks:

1. High User Losses: In the pump phase, users can face significant losses. The buy-in price toward the end can be up to 27% lower than the highest FDV due to fees and the removal of virtual liquidity. Even after successfully entering the pool, users who don’t sell their positions will still lose money.
2. Bot Exploitation: Pump.Fun’s bonding curve model is prone to bot exploitation. Bots often make early trades and sell once other users enter, leaving regular users with reduced profitability.
3. Liquidity Fragmentation: Many projects with similar meme token names often launch simultaneously, making it difficult for any single project to succeed. This fragmentation thins out liquidity and lowers the chances of success.

The aforementioned challenges restrict Pump.Fun’s launch success rate to a meager 1.5%, with 98.5% of launches failing, resulting in significant user losses. Forks of Pump.Fun perform even worse, with a success rate as low as 0.1%. Moreover, this model doesn’t integrate well with Berachain’s Proof of Liquidity (PoL), leaving users without the ability to mine BGT or benefit from protocol incentives—making it a boring experience for users.

Filling The Void With An Innovative Launch Mechanism On Berachain

The shortcomings of Pump.fun’s launch mechanism serve as one of the key reasons prompting the builders of Honeypot Finance to revolutionize token launch for new projects through a more enhanced and cost-efficient mechanism, i.e. FTO (Fair Token Offering).

FTO does everything that Pump.fun does, but it does a lot more, and in an efficient manner. Here’s what makes FTO the  perfect model for launching meme tokens on Berachain:

• Deep Liquidity Pool: FTO creates a 100% deep liquidity pool from day one, without pre-minted tokens. This prevents early investors from pumping or dumping tokens since there’s no early access.
• Lower Risk of Price Slumps: Project teams can sell LP tokens for development without causing a major price drop. The maximum loss for users is only 50%, compared to over 90% in many other launch models.
• Liquidity Providers and BGT Emissions: Both users and the project become liquidity providers, earning transaction fees based on their contributions. They also receive $BGT emissions from Berachain’s Proof of Liquidity, unlocking further monetization opportunities via the Flywheel model.

From FTO to Pot2Pump: Continuous Innovation in Meme Launches

While the FTO model fits perfectly into Berachain’s PoL, it wasn’t entirely suited for meme tokens, which are risky and often lack utility. Allocating 50% of LP to the token deployer is not ideal for meme tokens.

Realizing the need for a more efficient model for meme token launches, innovators at Honeypot Finance have adjusted this incentive to be much higher than Pump.Fun and its forks, offering a more fair and exciting launch experience. That’s how Pot2Pump came into being, as a successful and advanced iteration of FTO.

Pot2Pump combines all the advantages of the FTO model, with specific adjustments for meme tokens. Here are the key features of the Pot2Pump model:

1. Burning 40% of LP Tokens: Before entering the DEX phase, Pot2Pump burns 40% of the LP tokens. This reduces circulating liquidity, increasing token scarcity and potentially driving up prices post-launch, offering better returns to early participants.
2. Refund all funds if launch is not successful: If a launch fails to meet its fundraising goals within 24 hours, users can pay a gas fee and get a refund on their deposit. This ensures users don’t lose money, unlike Pump.Fun, where failed launches offer no refunds.
3. Lower Entry Barriers: Once the market cap reaches $20k, liquidity is added to the DEX, with support for single-sided liquidity. This further boosts the token price using the x*y=k model.
4. Protection Against Bots: Pot2Pump protects regular users by removing the early-stage trading advantages bots have. This levels the playing field, allowing all participants to benefit.
5. Higher Token Deployer Rewards: Pot2Pump allocates 5% LP token incentives to token deployers, and this incentive is flexible. Unlike Pump.Fun, where token deployers must pay a fee, Pot2Pump offers a more rewarding and adjustable structure.

The combination of low-risk participation, real liquidity, and a refund mechanism makes Pot2Pump a far more successful launch model than Pump.Fun. If the market cap reaches $69k, Pot2Pump ensures that all early participants triple their price, resulting in huge profits compared to Pump.Fun, where 70% of participants end up with losses. This gives Pot2Pump and upper hand over Pump.fun when it comes to the launch of meme tokens. 

Comparing the Models: Pot2Pump vs. Pump.Fun

Honeypot Finance’s innovation journey is just beginning. In exciting news, Honeypot Finance is also incubating BeraScout with BeraBoyz, a new SocialFi meme launchpad. More fun and innovative features are coming to revolutionize the space!

Join the Honeypot Finance community today and be part of the next wave of DeFi innovation.