Behind the successful launch of $TRUMP: Ripple and Galaxy's $160 million loan support alleviates MoonPay's liquidity crisis

Original Title: "How Ripple, Novogratz and MoonPay Helped Trump's Solana Meme Coin Succeed"

Author: Logan Hitchcock

Translated by: Deep Tide TechFlow

MoonPay is a cryptocurrency payment company that successfully secured a total of $160 million in loan support from Galaxy Digital and Ripple to meet the explosive demand during the launch weekend of Trump's official Solana chain meme coin TRUMP.

MoonPay President Keith Grossman revealed the details of this tripartite collaboration on the "When Shift Happens" podcast. He mentioned that MoonPay's CEO Ivan Soto-Wright made significant commitments for this, and the company also had to ensure that its reserve funds were free of any liens. Grossman stated, "The transaction volume was enormous. Our crypto liquidity was locked in BlackRock's accounts through traditional finance… and it was a Saturday."

Meanwhile, due to the promotional strategy of the Trump meme coin team, MoonPay's crypto reserve funds were quickly depleted. Users could purchase TRUMP through a mobile app called Moonshot, for which MoonPay was the exclusive crypto payment service provider.

Moonshot is designed for crypto newcomers, simplifying the process of buying meme coins. Users only need to register an account with their email and fund it via credit or debit card, avoiding the complexities of decentralized exchanges, making it very suitable for those new to cryptocurrency.

When users purchase TRUMP Tokens on Moonshot, their funds are converted into MoonPay's crypto reserves, primarily stablecoin USDC. These USDC are then used to purchase TRUMP Tokens on the Solana blockchain.

If MoonPay cannot provide sufficient liquidity to support the ongoing purchases of the Token, the newly added 750,000 users within a week of TRUMP's launch may not be able to obtain the Token smoothly. This would not only affect TRUMP's rapid growth in the early stages but could also negatively impact MoonPay's other users.

Grossman indicated that if MoonPay's funds ran out, the app might prompt users with "Sorry, unable to complete the transaction."

To prevent this situation, he, along with MoonPay's CEO Ivan Soto-Wright and CFO Mouna Siala, predicted the required amount of funds. Initially, they estimated needing $50 million, 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 accessed immediately, Grossman decided to contact Mike Novogratz from Galaxy Digital. After a brief communication, both parties quickly reached a loan agreement. MoonPay's team had to urgently process the relevant documents while confirming through BlackRock's connections that the company was capable of repaying the loan.

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

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

Ripple's CEO agreed to provide additional funding, but on the condition that MoonPay must obtain Galaxy's consent to ensure that the previous loan arrangement would not be affected. Ultimately, Ripple provided an additional $60 million loan to Galaxy, which was then transferred to MoonPay.

As traditional financial institutions in Europe and the U.S. resumed operations on Monday and Tuesday, MoonPay regained access to its funds and fully repaid the loan by Tuesday afternoon.

According to CoinGecko data, TRUMP Token averaged over $20 billion in trading volume in the first five days after its launch, and quickly reached a fully diluted valuation of over $73 billion in less than 48 hours (theoretical total market cap assuming all tokens are unlocked).

A few days after its launch, TRUMP successfully went live on the spot markets of well-known centralized exchanges like Binance and Coinbase, further lowering the barrier for new users to acquire the Token.

A representative from MoonPay confirmed to Decrypt that Grossman's account was accurate, but representatives from Galaxy and Ripple have yet to respond to Decrypt's request for comment.

Currently, the trading price of TRUMP Token is $15.37, down over 79% from its all-time high.