Social trading applications are rapidly expanding within crypto markets by integrating trading execution, public performance records, and community discussion into unified platforms. According to analysis from Syncracy Capital co-founder Ryan Watkins, these applications reached approximately $1.3 billion in weekly builder-code volume by August 24, 2024.
Fomo and Pump have reached daily active user counts similar to established platforms like Polymarket, Hyperliquid, and Phantom, each operating at 60,000 to 100,000 users. Social trading applications represent the fastest-growing segment of builder-code interfaces on Hyperliquid, accounting for approximately 33% of all builder-code volume. Crypto exchange OKX has also entered the sector through Orbit, its social trading platform combining group discussions, livestreams, and verified performance data.
Market Structure and Growth Mechanisms
These applications primarily offer perpetual futures on decentralized exchanges, allowing users to take leveraged positions without expiration dates. Collateral backs each position, with funding rates helping align contract prices and automated liquidations managing risk.
Creator rewards provide another growth mechanism. Pump has experimented with various fee structures for token creators, later rebalancing incentives between launches and trading participation. The platform has paid more than $450 million in rewards to token deployers.
Watkins noted that users often pay 2% to 3% per memecoin swap, significantly higher than trading major assets on spot exchanges at 20 to 30 times the typical cost.
Potential and Risks
Watkins predicted that social trading applications will drive substantial volumes to underlying blockchain infrastructure and exchanges processing their trades, potentially establishing similar market importance as earlier innovations like stablecoins and perpetual swaps.
The integrated nature of these platforms—combining communication, public performance records, and trade execution—could accelerate movements around individual traders or tokens. A February 2024 Securities and Exchange Commission investor alert warned that social media recommendations can support pump-and-dump schemes, undisclosed promotions, scalping, and impersonation.
Memecoins featured on these platforms typically have thin liquidity, which may limit copy trading at scale. The sector faces the unresolved question of whether speculation-focused applications can transition users toward tokenized securities, stablecoin savings, and other financial services while retaining their growth-driven audiences.
