The emergence of meme coin one-click minting platforms like Pump.fun has greatly reduced the cost of creating tokens while also making the already chaotic market more disordered. Strong speculative sentiment has led a large number of anonymous developers to quickly cash out and profit within a few hours of launching a token, leaving behind nothing but chaos.

On the brutal battlefield of meme coins, 99% of tokens are quietly smothered in their cradles. However, for certain projects, the exit of the original development team has instead led to the rise of “community governance,” further stimulating market participants’ enthusiasm and creating legendary comeback stories. This might be one of the reasons why CTO projects are becoming increasingly favoured by users. This article will explore the origins and development of CTO, highlight representative projects such as POPCAT, Quant, Moo Deng, and analyze the pros and cons of this model, its impact on tokens, and commonly used tactics, providing users with valuable insights.

What is CTO?

CTO (Community Take Over) refers to the situation where the original development team exits, and the project management and operation are taken over by community members.

Generally, when a new team takes over a project, there are two possible approaches to rebuilding:

1）Partial Inheritance: The new team inherits the original development team’s related accounts, meaning only the management team changes for the project.

2）Complete Separation: The new team starts fresh, creating new social media accounts, a new website, a new user community, etc., while maintaining the consistency of token information.

Although the democratization of asset issuance has made CTO increasingly common and popular, in a sense, BTC and DOGE can also be considered pioneer CTO projects. Satoshi Nakamoto’s identity remains a mystery, and the Bitcoin in his genesis block has never moved. Additionally, both of Dogecoin’s founders sold all their holdings in 2015 and completely exited community development. Isn’t this also another form of CTO?

CTO Representative Projects Overview

Not all CTO tokens transform into hidden gems after the original team exits. Still, now and then, some projects experience a rebirth, creating 100x or even 1000x returns, making crypto investors flock to them. Some representative CTO projects include：

POPCAT（$POPCAT）

POPCAT is a Solana-based meme coin, inspired by a short-haired domestic cat named “Oatmeal,” which has two distinct facial expressions: one with its mouth closed, and the other with its mouth open in an “O” shape.

Source: $POPCAT

The $POPCAT token was created on December 12, 2023, with an initial total supply of 1 billion tokens. The story started quietly, with the creator of $POPCAT cashing out all their tokens when the project’s market cap was under $100,000, selling it to a community user named @jpeggler for 35,000 USDC, including the contract update ownership and social media accounts.

Source: @jpeggler

Interestingly, during this period, the market cap of $POPCAT reached $50 million within just 10 days of launch. As $POPCAT’s popularity continued to surge, the original creator regretted their decision and tried to rejoin the project but was met with rejection and mockery from @jpeggler. Subsequently, under the banner of community governance, the price of $POPCAT skyrocketed. Within just 8 months of its launch, $POPCAT became the first meme coin with a cat theme to reach a market cap of $1 billion. In mid-November, it set a new historical record with a market cap surpassing $2 billion.

$POPCAT Price Chart (Source: dexscreener)

Although the price of $POPCAT has recently declined, it still maintains a total market cap of $1.3 billion, with high activity in the meme coin space. On-chain data shows that $POPCAT has around 114,700 holders. The top 10 and top 100 addresses hold 26.02% and 53.19% of the total supply, respectively.

Quant（$Quant）

Quant is a meme coin live-streamed by a 10-year-old “Kid Brother” on Pump.fun. On November 20, the Kid Brother spent $350 to buy around 51 million $Quant tokens but quickly sold them off within the next 10 minutes, making a profit of about $30,000.

$Quant Price Chart (Source: gmgn.ai)

While the story already sounds absurd, the drama escalated when, after cashing out, the Kid Brother gave everyone the middle finger as a sign of mockery, which immediately angered the entire community. Within the next 4 hours, the price of $Quant surged, and its market cap reached $100 million, with a 17,000x increase. The Kid Brother missed out on nearly $6 million in profit as a result.

After the community’s “revenge,” the price of $Quant plummeted, and the token’s market cap is now around $1.2 million. However, it’s worth mentioning that after tasting success, the Kid Brother launched two other meme coins—Sorry and Lucy, one possibly as an apology and the other named after his pet dog. Unfortunately, neither of these replicated the success of $Quant.

Moo Deng（$MOODENG）

Moo Deng is another Solana-based meme coin, created on September 10 this year. The inspiration for Moo Deng comes from a small pygmy hippo from Thailand, which gained global popularity due to its cute appearance and the amusing interactions it had with its keeper.

Source: $Moo Deng

According to on-chain data, the creator of $MOODENG sold off all 51 million tokens they held just hours after the token’s launch. However, just half a month later, the market cap of $MOODENG exceeded $400 million, and on November 15, it set a new historical high of $800 million. The price of $MOODENG has declined, but in under 3 months, it has increased more than 110,000x from its original price.

$MOODENG Price Chart (Source: gmgn.ai)

The success of $MOODENG can be attributed to the viral effect of its inspiration. However, for token holders, the exit of the original creator eliminated the possibility of insider trading, strengthening the community’s consensus and cohesion, which further helped drive up the token’s price. The latest data shows that $MOODENG has around 70,400 holders, with the top 10 addresses holding 37.58% of the total supply.

Pros and Cons of CTO Projects

The core principle of cryptocurrency is decentralization. Setting aside whether the original developers have bad intentions, the CTO (Community Takeover) model aligns perfectly with this principle.

For token holders and the community, when the founding team relinquishes their tokens or even exits the project, it may have some short-term effects on the project’s development. However, in the long run, it eliminates potential issues such as founder “whale” dumping, exploiting contract backdoors, and continuous token sell pressure and essentially reshuffles the token distribution.

This community-led project model significantly strengthens trust, engagement, and a sense of belonging among community members. If the cohesion of token holders is strong enough, it can also promote the project’s sustainable development. However, community governance also faces unavoidable challenges, such as decision-making efficiency, resource allocation, and potential conflicts of interest, all of which can profoundly impact the project’s progress.

Common CTO Tactics

For CTO projects, one must note that token holders cannot judge the takeover team’s true intentions. Is it short-term speculation or a long-term commitment to project development? Many projects even stage a fake CTO situation, using on-chain data to manipulate the market, causing serious losses for token holders.

The common tactics for these fake CTO projects are usually as follows:

1）Developers create a project and promote it;

2）When the token price rises, they cash out all their tokens;

3）The original developers use multiple wallets to buy back tokens, creating the illusion of a CTO takeover;

4）When the token price rises again, the original developers cash out once more.

On-chain data shows that these disguised projects may feature characteristics like high trading volume but low trading activity, along with sudden price surges.

Source: gmgn.ai

These tactics are relatively easy to identify for those adept at spotting on-chain trading opportunities. However, for users eager to jump in and often fall victim to FOMO (fear of missing out), it’s easy to fall into traps. To improve user trading experience, tools like GMGN offer developer indicators, which mark when developers have cashed out or destroyed tokens. Crypto traders can pay attention to these indicators and use the tools wisely.

Conclusion

Although CTO community takeover projects align with the decentralized governance principle of cryptocurrencies, the banner of “community autonomy” is not a guaranteed cure for token price increases. More than 99% of tokens still meet an inevitable death.

As crypto users, when facing the uncertainties of token trading, especially with Memecoins that amplify volatility, one must trade rationally, conduct thorough project research based on risk tolerance, and proceed with caution.