Meteora’s TGE: Valuing MET

Introduction: An Airdrop Three Years in the Making

Meteora's (MET) highly anticipated TGE will take place on Thursday, October 23. Unlike the recent trend of projects conducting an ICO sale, Meteora is not fundraising before TGE. Instead, the team is airdropping to eligible recipients, including Mercurial stakeholders, Meteora LPs, JUP stakers, and launchpad partners. Airdrop recipients will receive unlocked MET by default or choose to provide liquidity at launch to earn trading fees (up to a limit of 10% of the total supply of 1 billion tokens).

As historical context, Meteora was launched in February 2023 by the team behind Jupiter, Solana's largest DEX aggregator and perps trading platform. When Meteora launched, the previous iteration of the protocol, Mercurial Finance, was sunsetted. The reason behind shutting down Mercurial, along with its governance token (MER), was that there were significant amounts of MER involved in FTX/Alameda, so the team decided that the best course of action was to rebuild the platform with a new token (MET).

This report initiates coverage on Meteora, discussing its product suite, competitive positioning, and a relative valuation ahead of its TGE. 

Product Suite & Business Model

Meteora’s revenues are primarily transactional and scale directly with onchain trading volumes. Its first business pillar, the liquidity layer, earns a portion of the trading fees generated by LPs across DLMM and DAMM pools. The second business pillar, the launchpad business, captures a higher take rate. Around 20% of trading fees from new token launches conducted through Meteora’s infrastructure accrue to Meteora as revenue.

DLMM & DAMM Pools