Meteora is about to TGE: Can the new distribution mechanism break the Airdrop curse?

Written by: Oliver, Mars Finance

The highly anticipated liquidity protocol Meteora on the Solana ecosystem has finally set its native token $MET's Token Generation Event (TGE) for October 23, 2025. However, the Meteora team's ambitions clearly go beyond a conventional token launch. They define this as a “Liquidity Generation Event” (LGE) and claim it will be the debut of “the most revolutionary token issuance technology ever.” This is not just a catchy brand statement, but a carefully planned economic experiment aimed at directly challenging the prevalent “low liquidity, high fully diluted valuation (FDV)” model in the current crypto market, and attempting to fundamentally crack the destiny of immediate sell pressure brought about by airdrops.

This issuance revolves around three core mechanisms: an extremely wide launch pool price range, a trading tax starting at 50% and rapidly declining, and an innovative airdrop claiming method called “Liquidity Distributor.” These three pillars are interlinked and form the cornerstone of Meteora's redefined token issuance paradigm. This article will delve deeper, analyzing the issuance mechanism of $MET, the grand token economics behind it known as the “Phoenix Rebirth Plan,” and its intricate symbiotic relationship with Jupiter, a leader in the Solana ecosystem, ultimately assessing the potential impacts and market risks behind this gamble.

“Phoenix Nirvana Plan”: A Declaration of War Against High FDV Models

The issuance of Meteora's $MET token is a key horn of its “Phoenix Rising Plan.” This plan aims to lead the project to completely break free from the predicament caused by its predecessor, Mercurial Finance, due to the FTX collapse, achieving a thorough rebirth and brand reshaping. The core of this plan is embodied in a highly disruptive token economic model, whose most distinctive feature is a direct challenge to the industry's long-standing “low circulation, high FDV” model.

Unlike many projects that release a negligible amount of tokens at the TGE to maintain a high valuation, Meteora has chosen to push 48% (i.e., 480 million) of the total supply of 1 billion $MET tokens fully into the market at the launch. The team has clearly stated that this move aims to “break the model of low circulation/high FDV.” More importantly, aside from the 18% held by the team and the 34% reserved for the ecosystem which will undergo a six-year linear unlock, all tokens allocated to the community and early supporters will be 100% unlocked at the TGE, with no ambiguity.

This high-profile, high-traffic strategy is essentially a ultimate test of market confidence. It actively eliminates the endless selling pressure expectations brought about by continuous unlocking in traditional models, shifting the value support of the tokens from the artificially created illusion of scarcity to the real utility of the protocol itself and community consensus.

The table below details the allocation of $MET at the TGE:

This allocation plan is far more than just an economic blueprint; it is a clear depiction of the “geopolitical declaration” of Meteora's alliances and priorities within the Solana ecosystem. Allocating 20% of the tokens to former MER holders is a crucial step in rebuilding trust and restoring reputation after the FTX incident; this move aims to transform potential negative assets (angry old users) into a solid base of supporters. 15% of the tokens are allocated to reward the “LP Legion” that provided liquidity during the protocol's no-token phase, ensuring that core community members become the biggest beneficiaries and staunch supporters of the issuance. Meanwhile, allocating 3% of the tokens to Jupiter's stakers is a strategically insightful ecological alliance that directly ties the largest and most active DeFi community on Solana, linking it with the liquidity generation of $MET from day one.

Liquidity Dispenser: Can it Break the Airdrop Curse?

For a long time, airdrop activities have been plagued by a nightmare: a large number of users immediately sell off their rewards after receiving them, causing a devastating impact on token prices. The “Liquidity Distributor” mechanism launched by Meteora is an innovative solution aimed at addressing this pain point.

The core of this mechanism lies in the complete restructuring of the delivery format for airdrops. Eligible airdrop recipients will not receive tradable $MET tokens directly, but will have the option to receive their airdrop shares in the form of a Liquidity Position (LP Position). These LP positions typically exist in the form of NFTs, representing a user's real liquidity in the $MET related trading pool.

The brilliance of this design lies in its fundamental alteration of the recipient's incentive structure:

From sellers to earners: Once users choose to receive LP positions, they immediately start earning transaction fees from the launch pool. This dramatically transforms their identity from potential “sellers” to active “liquidity providers” and “earners.”

Elegant exit by breaking down the whole into parts: the process for users to “sell” airdrops is no longer a blunt market sell order, but rather completed gradually as prices fluctuate within the LP range they provide. This greatly smooths out selling pressure and avoids instant shocks to the market.

Community-driven liquidity guidance: The most critical aspect is that this mechanism cleverly utilizes the tokens of the airdrop recipients to guide the initial liquidity of $MET, rather than relying on project funds. This tightly binds the interests of community members to the liquidity health of the protocol from the very beginning.

From the perspective of behavioral economics, the “liquidity distributor” is a complex psychological experiment. It aims to shift users' thinking patterns from “predatory” (How much can I sell for?) to “co-creation” (How much can I earn?). By leveraging the “endowment effect” (users tend to value their own assets that can generate returns more highly) and “loss aversion” (the fear of missing out on transaction fee revenue may suppress the impulse to sell immediately), Meteora is attempting to reshape the game dynamics of airdrops. If successful, this could provide a new playbook for how future projects reward communities and manage volatility during TGE.

Engine Revealed: How DLMM Drives Everything in Meteora

Behind all the innovative mechanisms of Meteora lies a common technological foundation — Dynamic Liquidity Market Maker (DLMM). DLMM is not only a star feature of Meteora but also the underlying engine that allows its entire ecosystem to operate.

The fundamental difference between DLMM and traditional automated market makers (AMM) lies in its granular management of liquidity. It introduces several key concepts:

Price Bins: DLMM organizes liquidity in a discrete manner across different price ranges (i.e., “price bins”), similarly to arranging bookshelves, rather than distributing it smoothly along a continuous price curve like traditional AMMs.

Zero Slippage Trading: Trades are conducted at the fixed price set within any active “price box,” resulting in zero slippage. This allows for extreme capital concentration, significantly enhancing efficiency.

Dynamic Fees: This is the highlight of DLMM. The transaction fees are automatically adjusted based on market volatility. When the market experiences significant fluctuations, the fees increase accordingly to compensate liquidity providers (LPs) for potential losses incurred due to the increased risk of impermanent loss.

Custom Liquidity Shapes: LPs are no longer bound by the traditional 50/50 asset ratio. They can create different liquidity distribution shapes based on their market judgment, such as “Spot”, “Curve”, or “Bid-Ask”.

The emergence of DLMM marks the evolution of liquidity provision from the early AMM's “set-it-and-forget-it” passive model to a refined operational model that requires active strategy management. It brings complex tools that were originally only accessible to professional market makers to the fingertips of ordinary retail users. It is precisely the high flexibility of DLMM, especially its support for unilateral liquidity pools and the ability to customize price curves, that has turned innovative concepts like Meteora's LGE and liquidity distributor from blueprints into reality. It can be said that without DLMM, the entire issuance strategy of Meteora would be a castle in the air.

Solana's Symbiote: Analyzing the Alliance between Meteora and Jupiter

To fully understand the strategic position of Meteora, it is essential to analyze its inseparable relationship with Jupiter, the leading trading aggregator in the Solana ecosystem. The two are not competitors, but rather two pillars that are interdependent and complement each other within the Solana DeFi infrastructure.

This symbiotic relationship is reflected on multiple levels:

Technological Depth Dependency: Jupiter's highly acclaimed LFG Launchpad is powered by Meteora's unilateral DLMM pool. DLMM provides project parties on Jupiter with weapon-grade tools to guide liquidity and manage price discovery curves.

Common founding team: The two projects are backed by the same founding team, which determines that there is a common vision and long-term strategic synergy between them at a genetic level.

The publicization of strategic cooperation: Meteora allocates 3% of the $MET tokens to Jupiter stakers, which is the clearest signal of this alliance. This is a textbook-level cross-protocol incentive aimed at deeply integrating the two communities, ensuring that Jupiter's large user base has a direct economic interest in Meteora's success.

Ecosystem Role Division: In the Solana ecosystem, Jupiter plays the role of “traffic entry and user front-end”, providing optimal price trading and a rich set of trading tools; while Meteora takes on the role of “liquidity infrastructure”, offering efficient and advanced liquidity pools that accommodate a large volume of ultimately routed transactions.

Meteora and Jupiter are joining forces to execute a classic “platform stack” strategy to build an insurmountable moat. Jupiter masters user relationships and traffic distribution, while Meteora firmly holds the underlying liquidity technology. The combination provides a vertically integrated solution for token issuance and trading on Solana, forming a powerful, self-reinforcing closed loop: Jupiter's traffic brings projects and trading volume to Meteora's technology, while Meteora's advanced technology makes Jupiter's launch platform and aggregator more efficient and attractive. This symbiotic relationship reinforces their dual oligopoly position in the Solana DeFi space.

A meticulously calculated adventure: market sentiment and the unknown road ahead

The issuance of $MET by Meteora is undoubtedly a bold innovation, but its path is also accompanied by significant market risks. Currently, community sentiment shows a clear polarization.

Optimists argue that the community is eager for a “fair launch” aimed at rewarding long-term supporters and challenging the venture capital-led predatory issuance model. Its innovative mechanism is seen as a potential model that could set a new standard for DeFi. Additionally, Meteora has already achieved significant trading volume and total value locked (TVL) with its products prior to the token issuance, demonstrating its strong product-market fit.

The concerns of pessimists mainly focus on the tsunami-like selling pressure that could be brought about by an initial circulation of up to 48%. Analysts worry that even with the buffer of the LP model, airdrop recipients will ultimately choose to cash out, resulting in the token price lingering at the bottom for a long time. At the same time, historical controversies related to the LIBRA token and the resignation of the CEO have also raised some doubts about its governance and execution capabilities.

Overall, the market performance of $MET after issuance may present the following three scenarios:

Bull Market Scenario: After an early sell-off, the tokens are quickly absorbed by long-term believers and savvy liquidity providers, stabilizing the price and initiating a strong rebound.

Neutral Scenario: After the initial volatility, prices tend to stabilize, and market attention shifts to the actual utility of the tokens and their ability to capture fees.

Bear market scenario: Huge initial supply overwhelms market demand, leading to prolonged price stagnation until the protocol can demonstrate its irreplaceable long-term value.

Ultimately, the TGE of Meteora is the ultimate test of a core cryptoeconomic hypothesis: Can the long-term value of a token be sustained solely by its pure utility, fair distribution, and community ownership in the face of a massive initial supply? Or are market sentiment and speculative narratives (such as scarcity resulting from low circulation) still more powerful forces? The final outcome of the $MET issuance will provide a highly valuable reference case for the entire industry. If successful, it will validate the feasibility of the “fair launch” concept, providing a new playbook for community-driven projects. If it fails, it may prove that, regardless of good or bad, the market still prefers carefully managed scarcity and compelling speculative narratives during the token issuance phase. This is not only about the price of $MET but also about the direction of countless future token issuance models.