Compiled by: TechFlow
MoonPay is a crypto payment company that successfully obtained a total of $160 million in loan support from Galaxy Digital and Ripple to cope with the explosive demand for Trump's official Solana chain Meme coin TRUMP during the launch weekend.
MoonPay President Keith Grossman revealed the details of the three-way partnership in the "When Shift Happens" podcast. He mentioned that MoonPay CEO Ivan Soto-Wright made a major commitment for this, and the company also had to ensure that its reserve funds had no liens. Grossman said: "The trading volume is really huge. Our crypto liquidity is locked in BlackRock's account by traditional financial methods... and it was Saturday."
At the same time, MoonPay’s crypto reserve funds were rapidly consumed due to the promotion strategy of the Trump Meme Coin team. Users can buy TRUMP through a mobile app called Moonshot, and MoonPay is the exclusive crypto payment service provider for this app.
Moonshot is designed for crypto newbies and simplifies the purchase process of Meme coins. Users only need to register an account with an email address and top up via credit or debit card, without having to deal with the complex operations of decentralized exchanges. It is very suitable for users who are new to cryptocurrency.
When users buy TRUMP Token on Moonshot, their funds are converted into MoonPay’s crypto reserves, primarily the stablecoin USDC. These USDC are then used to buy TRUMP Token on the Solana blockchain.
If MoonPay cannot provide sufficient liquidity to support the continued purchase of tokens, the 750,000 new users added within a week of TRUMP’s launch may not be able to obtain tokens smoothly. This will not only affect TRUMP’s rapid growth in the early stages, but may also have an adverse impact on other MoonPay users.
If MoonPay runs out of funds, the app may prompt the user with a "sorry, we can't complete the transaction," Grossman said.
To avoid this, he, MoonPay CEO Ivan Soto-Wright and CFO Mouna Siala predicted the amount of funds needed. Initially, they estimated that $50 million would be needed, but after reassessing the rapid growth of TRUMP Token within 24 hours of its launch, this figure quickly doubled to $100 million.
However, since MoonPay's reserve funds were locked in the traditional financial system and could not be used immediately, Grossman decided to contact Mike Novogratz of Galaxy Digital. After a brief communication, the two parties quickly reached a loan agreement. MoonPay's team had to urgently process the relevant documents and confirm through BlackRock's relationship that the company was able to repay the loan.
But even so, $100 million was still not enough. As the demand for TRUMP Token continued to soar the next day, MoonPay turned to Ripple Labs CEO Brad Garlinghouse for help.
“We underestimated the demand for Trump tokens,” the MoonPay team told Garlinghouse.
Ripple's CEO agreed to provide additional funding, but on the condition that MoonPay obtain Galaxy's consent to ensure that the previous loan arrangement is not affected. In the end, Ripple provided Galaxy with an additional $60 million loan, which was then transferred to MoonPay.
As traditional financial institutions in Europe and the United States resumed operations on Monday and Tuesday, MoonPay regained access to its funds and repaid the loan in full by Tuesday afternoon.
According to CoinGecko data, TRUMP Token had an average trading volume of over $20 billion in the first five days after its launch, and quickly reached a fully diluted valuation of over $73 billion (i.e. the theoretical total market value assuming all tokens are unlocked) in less than 48 hours.
A few days after its launch, TRUMP was successfully listed on the spot market of well-known centralized exchanges such as Binance and Coinbase. The participation of these exchanges further lowered the threshold for novice users to obtain the token.
A MoonPay representative confirmed to Decrypt that Grossman's account is accurate, but representatives from Galaxy and Ripple have not yet responded to Decrypt's request for comment.
Currently, TRUMP Token is trading at $15.37, down more than 79% from its all-time high.
