The Heaven memecoin launchpad buys back everything — no, really

This is a segment from the Lightspeed newsletter. To read full editions, subscribe.

When do buybacks make sense?

According to the wisdom of TradFi, buybacks have typically been motivated by three reasons: when growth opportunities are scarce and revenues cannot be increased further, when a stock trades below its intrinsic value, or as a tax-efficient way to return dividends to investors.

From this viewpoint, the dozens of crypto companies spending multimillion-dollar budgets on token buybacks seem to be doing something grossly wrong.

The growth opportunities to launch an adjacent product in crypto are vast (forking open-source code is free), plus most tokens have not been around long enough to establish any kind of fair market value.

But buybacks in crypto serve a uniquely different purpose of marketing. Specifically, buybacks signal legitimacy in a token market plagued by what has been called crypto’s lemon market problem.

So if you’re doing buybacks, you may want to put the pedal to the metal and go all in.

That’s the plan of “Heaven,” the latest memecoin launchpad to open its pearly gates on Solana.

Backed by the Solana Foundation’s Colosseum accelerator/hackathon, Heaven is purportedly committing 100% of its protocol revenues to buybacks of its native token, LIGHT. And the buybacks aren’t for a period; but forever.

That’s nuts! This is a team that only raised $27 million in an ICO two weeks ago.

About $1.4 million in lifetime revenues (by “lifetime,” I mean one week) has been spent on buyback-and-burns for 2% of its total token supply — what the team terms its “God Flywheel.” The result is a six-day-old token that has traded up 225% to a $64 million market cap as of today.

Source: Trading View

You can see Heaven’s traction based on the corner blot of black on the chart below. Yesterday saw Heaven deploy 3,865 tokens, or about 15% of launchpad market share.

Source: Dune

Pump still has the lead, but Heaven’s revenue buyback gimmick has garnered it enough attention to put it ahead of launchpads like LetsBonk, Moonshot and Jup Studio, all of which have been around for a while.

Heaven’s memecoin launchpad is tightly integrated with its own AMM DEX, which launches tokens exclusively from its own launchpad from the second one.

This vertically integrated design eschews the standard bonding curve design of memecoin launchpads in pursuit of two key objectives.

One, it lets Heaven customize stricter parameters around fee collection.

Heaven-launched tokens are manually gated by the team and categorized under one of three categories. Tokens flagged under the “Creator” (i.e., serious) label can claim 1% of fees for themselves, those under the “Community” (i.e., non-serious) label are entitled to only 0.1%, while “Blocked” tokens are entitled to none.

In the founder’s words: “…When you trade a token and see Heaven as the DEX, you know that it’s gone through the heaven gauntlet.”

All protocol fees from token trading on the DEX go directly to buying back and burning LIGHT.

Source