In-depth analysis of the working mechanism of Meteora Crypto, why it was once highly sought after, and what the 2025 airdrop and token distribution issues that triggered a market trust crisis mean for ordinary users.
Meteora Background and Positioning
Meteora is a decentralized liquidity protocol / DEX built on Solana, restructured from Mercurial Finance, launched in 2023. Its goal is to establish a more efficient, flexible, and fair (theoretically) liquidity infrastructure within the Solana ecosystem. Unlike traditional DEXs, Meteora focuses more on providing an infrastructure layer for liquidity providers (LPs), project launchpads, as well as the issuance and trading of crypto assets, rather than just being an ordinary exchange or AMM.
Technical Mechanism: DLMM / DAMM + Launchpad Function
The two core mechanisms of Meteora are DLMM (Dynamic Liquidity Market Maker) and DAMM (Dynamic AMM). DLMM allows LPs to concentrate liquidity within a specified price range, while DAMM dynamically adjusts rates and liquidity distribution based on market fluctuations, thus maintaining deeper liquidity and lower slippage even during high volatility. Furthermore, Meteora is not just a liquidity pool; it also supports launchpad / launch-pool / token-launch infrastructure — meaning projects can leverage Meteora to issue / launch new tokens / assets and support asset trading / circulation through its liquidity system.
This combination - liquidity foundation + asset business launch + token mechanism - gives Meteora a quite extensive and deep influence within the Solana ecosystem.
Token MET: Allocation, Use and TGE
The native token of Meteora is MET. The total supply is 1 billion. On October 23, 2025, Meteora will officially hold its TGE (Token Generation Event), with 48% of the tokens being put into circulation. The remaining portion will be allocated to the team (vesting unlock), reserves, liquidity/incentive pools, cooperative projects/exchanges, etc. The uses of MET include: governance, staking, fee discounts, participation in liquidity incentives, and supporting future project issuance/liquidity allocation (launchpad/pools).
Due to the liquidity mechanism + token mechanism appearing to be reasonably designed, many early users / LPs have high expectations for Meteora, believing it may become the new liquidity infrastructure standard for the Solana ecosystem.
Hot events and controversies in the autumn of 2025
However, with the TGE and airdrop of MET, token allocation, and collaborations with multiple meme coin projects/launches, Meteora has recently been embroiled in controversy.
- Airdrop / Uneven distribution: According to reports, a small number of large wallets (“whales”) received 28.5% of the airdrop share, while over 60,000 ordinary retail investors only received 7%.
- Pump-and-dump and legal action: The co-founder of Meteora and his team are accused of using their liquidity mechanism to conduct pump-and-dump schemes in the meme coin market, including leveraging celebrity effects, controlling liquidity, concentrating funds, inflating prices, and then selling for profit. The tokens involved include several projects that once caused a sensation but ultimately experienced a big dump.
- Airdrop flow to sensitive addresses: During the TGE airdrop phase, reports indicate that some wallets associated with a certain political figure/team received millions of dollars worth of MET tokens, raising concerns regarding regulation, ethics, and trust.
This series of events has caused many who were originally confident in Meteora to start worrying: Is Meteora really that decentralized, transparent, and fair? Or is its system just beautifully packaged, yet easily manipulated by a few large holders/institutions/internal players?
Investment/Usage Suggestions + Risk Warning
For ordinary users and LPs, if you are considering participating in Meteora’s liquidity pool, staking, token launch, or future project launchpad, you need to be extra cautious.
- Be sure to understand the vesting schedule, and pay attention to how the team/reserve/incentive pool unlocks to avoid selling pressure from token unlock waves.
- Examine the liquidity and distribution structure, and be cautious of whether “whales / large holders / institutions” dominate.
- Be cautious of meme coins / launchpad projects, especially those that are clearly hyped up and attract retail investors through celebrity endorsements / celebrity effects / social media promotions.
- Do not blindly chase highs. Even if the DLMM / DAMM technology and design sound appealing, remember the volatility and systemic risks of the crypto / DeFi market.
If you are interested in DeFi, liquidity mining (LP), and token launchpads, you can consider it as a high-risk/high-reward attempt — but you should control the scale of your investment and not concentrate all your funds on a single project.
Conclusion
Meteora was once considered a promising newcomer in the Solana ecosystem that could change the liquidity infrastructure landscape: its DLMM / DAMM model, token mechanism, and launchpad functionality make it seem like a technologically advanced and imaginative platform in the DeFi world. However, a series of events in the fall of 2025 — uneven airdrop distribution, pump-and-dump allegations, controversial token launches, legal issues with the founding team — undoubtedly cast a heavy shadow over the project and remind us that behind high yields and high heat often accompany high risks and uncertainties.
For ordinary users / LPs, if you choose to participate in Meteora, it is advisable to carefully assess the risks, diversify your investments, and remain vigilant. The charm of DeFi lies in its openness and innovation, but it is precisely because of this openness and decentralization that it hides structural and moral risks.
* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.
