Some people claim that the rise of launchpads saved the once-chaotic memecoin market, but the reality is quite different. The emergence of launchpads has actually lowered the peak prices of memecoins. While this is partly due to liquidity being diluted by the ease of token creation, the most crucial factor is that launchpads actively encourage it.
You can see why by looking at their revenue model. Launchpads typically earn a 1 percent trading fee on the bonding curve, but once a token bonds and moves to the AMM, that fee drops to just 0.05 percent. Because launchpads generate their highest profits on the bonding curve, they dislike trading volume concentrating on just one or two tokens. To maximize profits, they push for the issuance of as many tokens as possible, driving heavy trading volume within the bonding curve. They want traders to chase a new, shiny narrative every single day, some of which are artificially manufactured by the launchpads themselves, like the currently trendy AI influencer and agent meta.
In conclusion, because the very existence of launchpads discourages liquidity from concentrating on a handful of tokens, token price peaks are inevitably capped. The only exceptions are when there is fierce competition between launchpads or a strong marketing necessity. In those cases, launchpads are willing to take losses and sharply pump their tokens to annihilate rival platforms. That is when liquidity is at its peak and the market becomes a true window of opportunity. However, once the competition ends and a single launchpad returns to a monopoly, token peaks plummet once again. This is the beginning and end of how launchpads operate.
From this perspective, the only way for normies to turn a profit is to enter the market strictly during competitive phases. That is when liquidity is most abundant. Once things revert to a monopolistic state, the launchpads' operational model, which encourages rotational trading, severely limits token price peaks and dramatically increases the likelihood of taking losses.