Behind the unknown launch of TRUMP: $160 million loan support from Ripple and Galaxy to resolve MoonPay liquidity crisis

Author: Logan Hitchcock

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 in response to the explosive demand of Trump's official Solana chain Meme currency TRUMP on the weekend of its launch.

MoonPay President Keith Grossman revealed the details of the tripartite cooperation in the "When Shift Happens" podcast. He mentioned that MoonPay CEO Ivan Soto-Wright made a significant commitment to this and the company must also ensure that there is no lien on its reserve funds. "The volume of transactions is really huge. Our crypto liquidity is locked in BlackRock's account by traditional financial means... and that day was Saturday."

Meanwhile, MoonPay's crypto reserve funds were quickly consumed due to the promotion strategy of Trump's Meme coin team. Users can purchase TRUMP through a mobile app called Moonshot, which is the exclusive crypto payment service provider for the app.

Moonshot is designed for crypto-novice and simplifies the purchase process of Meme coins. Users only need to register an account with email and recharge through credit or debit cards, without facing the complex operations of decentralized exchanges, which is very suitable for users who are first exposed to cryptocurrencies.

When users purchase TRUMP Tokens on Moonshot, their funds are exchanged for MoonPay's crypto reserves, mainly stablecoin USDC. These USDCs were then used to purchase TRUMP Tokens on the Solana blockchain.

If MoonPay cannot provide sufficient liquidity to support the continuous purchase of Tokens, the 750,000 new users added within one week of TRUMP's launch may not be able to obtain the token smoothly. This will not only affect the rapid growth of TRUMP in the early stages, but may also have adverse effects on other MoonPay users.

Grossman said that if MoonPay runs out of funds, the app may prompt the user to "sorry, the transaction cannot be completed."

To prevent this from happening, he predicted the amount of funds needed with MoonPay CEO Ivan Soto-Wright and CFO Mouna Siala. Initially, they estimated $50 million, but after reevaluating the rapid growth of TRUMP Token within 24 hours of its launch, the figure quickly doubled to $100 million.

However, because MoonPay's reserve funds were locked in the traditional financial system and could not be used instantly, Grossman decided to contact Galaxy Digital's Mike Novogratz. After simple communication, the two parties quickly reached a loan agreement. MoonPay’s team had to urgently process the relevant documents, while confirming through BlackRock’s relationship that the company has the ability to repay the loan.

But even so, $100 million is still not enough. As demand for TRUMP Token continues to soar the next day, MoonPay seeks help from Ripple Labs CEO Brad Garlinghouse.

"We underestimated the demand for Trump tokens," the MoonPay team told Garlinghouse.

Ripple's CEO agreed to provide additional funding, provided that MoonPay must obtain Galaxy's consent to ensure that previous loan arrangements are not affected. Eventually, Ripple offered Galaxy an additional $60 million in 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 paid the loan in full Tuesday afternoon.

According to CoinGecko, TRUMP Token's average transaction volume exceeded $20 billion in the first five days after its launch, and quickly reached a fully diluted valuation of more than $73 billion in less than 48 hours (i.e., assuming all tokens are unlocked) Theoretical total market value).

A few days after its launch, TRUMP successfully launched the spot market of well-known centralized exchanges such as Binance and Coinbase. The addition of these exchanges further lowers the threshold for novices to obtain the token.

A MoonPay representative confirmed to Decrypt that Grossman's narrative was accurate, but representatives from Galaxy and Ripple have not responded to Decrypt's request for comment.

Currently, TRUMP Token is trading at $15.37, down more than 79% from its all-time high.