Feasibility Study Of MemeFi(DAO)
Last updated
Last updated
The current Memecoin ecosystem faces several critical challenges (excluding risks like insider trading, Rug Pulls, or fraudulent activities, which are addressed by ):
Single Revenue Channel: Investors can only profit through buying low and selling high, but in volatile markets with sharp surges and crashes, most end up as "bag holders," with the majority incurring losses (CoinGecko data shows an average 80% retracement for Top 100 Memecoins).
Liquidity Traps: Traditional Memecoin LaunchPads burn LP tokens to lock liquidity, permanently losing market-making income that could benefit the community.
High Market-Making Risks: AMM liquidity providers face impermanent loss + token devaluation risks, with over 90% of Memecoin LP pools ending in losses (Dune on-chain data).
Lack of Utility: Memecoins are primarily speculative assets with no practical use, which is the main reason why they are criticized. Short-term emotional stimulation cannot support the long-term development of the community. History has shown that memecoins without long-term consensus will eventually fail.
Lack of community governance: As the most community - driven token, memecoins lack community governance tool. Almost all Memecoin have communities but no governance. Once disputes arise, chaos ensues, with only loud arguments and no consensus due to the absence of objective governance mechanisms and the prevalence of subjective emotional expression, ultimately leading to failure. Some Memecoins attempt to address these issues with centralized governance. However, community members can only rely on a specific team. If the team acts maliciously or with negligence, the entire community will also fail or become a tool for exploitation by conspiratorial groups.
In this environment, the market urgently needs a coin - based, risk - free, and sustainable yield tool. It should let Memecoin holders capture ecological value without selling. Also, it should use DAO governance to resolve community disputes and empower Memecoins.
The Memecoin Yield Vault, built on ERC4626, restructures value flows:
Value Capture:
Traditional Memecoin LaunchPads burn LP tokens → Permanent loss of Market-making fees.
Outrun directs all Memecoins into a Genesis Liquidity Pool, locking LP tokens and channeling fees into the vault → Market-making fees become staker rewards.
Risk Isolation:
Users stake Memecoins alone, avoiding paired assets and impermanent loss.
Rewards sourced from trader-paid fees, independent of token price.
Anti-Selloff Design:
Stakers earn token rewards daily, reducing the incentive for short-term selling.
Vault income scales with trading volume: more speculation = higher staker APR.
DAO Governance:
Staked Memecoins mint vault tokens, which serve as governance tokens.
Participating in Memecoin community governance allows members to decide how to develop practical features for the Memecoin and reinvest the generated income back into the community.
Factor
Traditional Memecoin
Traditional AMM LP
Memeverse Vault
Revenue Source
Price appreciation
Trading fees
Trading fees + token appreciation
Risk
Rug / token volatility
High impermanent loss
Only token volatility
Capital Efficiency
100% spot exposure
50% idle capital
100% earning yield
Sustainability
None
Requires liquidity
Tied to volume (high turnover)
Community Value Capture
Zero
Partial
Full fee redistribution
Holder Behavior
Passive holding
Active management
Passive holding + yield
Revenue Source:
Revenue sources: The Memecoin portion of the market-making income from the genesis liquidity pool (after protocol fees, 0.35% of the 0.7% transaction fee goes to the vault, and the UPT portion is guided by the corresponding Memecoin DAO governance). Since the genesis liquidity pool initially holds all of the Memecoin, the primary on-chain market-making income for Memecoin in the future will be captured by the genesis liquidity pool. (The introduction of additional income sources by the community through governance, such as developing practical applications based on Memecoin like social platforms, games, AI agents, etc., to generate more revenue, is not discussed for now.)
APR Formula: APR = Daily Turnover Rate × 0.35% × 365 ÷ Staking Rate
Daily Turnover Rate: Volume ÷ Market Cap
Staking Rate: Staked token amount ÷ Total supply
APR Simulations:
Daily Turnover
Staking Rate
APR
100%
10%
1,278%
100%
20%
639%
500%
10%
6,388%
500%
20%
3,194%
1,000%
10%
12,775%
1,000%
20%
6,388%
10,000%
10%
127,750%
10,000%
20%
63,875%
In the future, OutSwap will introduce a dynamic fee mechanism that adjusts the fee rate in real-time based on on-chain transaction frequency, thereby increasing the income to the treasury:
When trading volume surges, the fee rate will automatically increase (e.g., from 1% to 3%), resulting in non-linear growth of revenue.
During periods of high price volatility (usually accompanied by a spike in trading volume), it will automatically capture higher value.
Hedging Mechanism for Sell Pressure:
Stakers earn token rewards daily → Reduces the incentive for "panic selling."
High APR attracts long-term holders → Reduces volatility in circulating supply.
Speculators Support Token Holders:
Higher trading volume → More fees → APR increases → Attracting more staking → Circulating supply shrinks → Token price rises, forming a positive feedback loop.
Liquid Staking: Vault tokens integrate with DeFi (lending, liquidity pools), unlocking capital efficiency.
Auto-Compounding: Yield reinvestment for compound growth.
Governance Expansion: Stakers participate in Memecoin community governance, controlling the allocation of corresponding Memeverse DAO treasury income (the UPT portion of market-making income, not the Memecoin Yield Vault income), incentivizing the community to develop more practical features for Memecoin.
The Memeverse treasury essentially transforms Memecoin into:
Yield-bearing asset: Holding tokens = automatically earning ecosystem transaction taxes.
Governance credential: Participating in Memecoin community governance to enhance Memecoin's practical features.
DeFi underlying asset: Accessing more complex financial strategies through ERC4626 integration.
User Mindset Shift:
Users no longer see Memecoin as a mere price speculation tool, but as a yield-bearing asset that appreciates on its own. Holding it generates income, completely changing the anxious mindset of "losing if it doesn’t rise."
Users shift from "abandoning yields due to risk" to "managing risk through mechanisms." Outrun uses technical means to encapsulate and transfer impermanent loss risk to a black hole (and FFLaunch eliminates insider trading and fraud risks), allowing users to capture ecosystem profits simply by staking.
Users evolve from "short-term speculators" to "eco-builders," participating in Memecoin community governance by holding yield-bearing staked tokens, guiding the community's values and the distribution of Memecoin DAO treasury income. The longer they hold, the higher their returns and influence, and the income generated by community governance is reinvested into the Memecoin treasury, forming a mutually beneficial ecosystem co-building community.
Ultimate Goal: Make Memecoin break free from the "pure gambling tool" label and transform it into a sustainable, long-term holdable value-capturing utility token.
"We don’t predict the future—we build it." — Outrun Core Team
