Thread by @TheiaResearch

meme markets are drying out due to a lack of exogenous capital flows.

meme model is basically predator-prey model where retail traders are prey and feed on exogenous capital flows (i.e. new wallet downloads that buy SOL with USD and then buy memes) and entire sniper / bot / industrial meme shop complex are predators.

as long as there are new capital flows (WIF up >100x, Phantom top of app store) then retail traders can sell memecoins at a higher valuation. the prey is well fed and so the entire predator complex can charge high prices / create memes with insider allocations / etc.

if new capital flows dry up then retail traders start to slowly bleed out as predators take 1-3% every time capital turns over. over time retail starts to die off and puts the predator complex at risk.

This trend can turn around if there is another WIF moment where thousands of outsiders bring in exogenous capital flows back into the meme market

but it will naturally go to 0 in the absence of an event that brings in exogenous capital flows. That's the nature of these predator-prey models when prey food supply is down bad.

here is a Cursor model for the equilibrium because why not

Core Variables:
- R: Retail traders (prey) - measured in "capital units"
- P: Predator complex (bots/snipers/industrial shops) - measured in "extraction capacity"
- F: Exogenous capital flows (food source) - measured in "new capital per period"

Parameters:
- alpha: Retail trader growth rate from capital flows
- beta: Predator efficiency in extracting from retail
- gamma: Predator natural decay rate
- delta: Retail trader natural decay rate (bleeding out)
- epsilon: Capital flow decay rate
- theta: Predator impact on retail (extraction rate)