So far this cycle, fundamentals plays have been few and far between. Banana Gun offered a strong fundamental thesis as cash flow generating picks-and-shovels of memecoin mania, with growth potential as crypto mobile and trading terminal.

At the time of our report in February, Telegram bots like Banana Gun carried a memecoin stigma. Their fundamentals were shifting from unsustainable token tax to real revenue distributed in-kind to token holders. Banana Gun was emerging as the leader, and at the time, BANANA was undervalued based solely on a zero-growth dividend discount model. When accounting for moderate growth assumptions, $65 looked like an attainable target. On Jul-19, BANANA smashed through our bull scenario on the heels of a Binance listing before temporarily retracing.

Banana Gun volume tripled in Q2, consistently reaching over $240M in weekly volume compared to the trend of ~$80M in Q1. Memecoin trading has cooled off and weekly volume has settled above $100M. Memecoin trading will likely continue to be highly cyclical, and Banana Gun will seek to make inroads with inelastic use cases with its upcoming web app.

The once-saturated Telegram bot market has largely consolidated into six majors players: Banana Gun, Photon, BullX, Trojan, Maestro, and Bonkbot. Photon, BullX, and Trojan dominate Solana volume at the moment, making significant gains at the expense of Bonkbot. Solana remains the premier venue for memecoin trading. Photon data shown above could be overstated, and is likely boosted by its web app.

Of the five major bots, Banana Gun and BonkBot are the only bots with liquid tokens. As discussed in our original report, BONK represents much more than Bonkbot alone, and does not offer concentrated exposure to the Bonkbot business. The value extraction narrative has been a major topic of discussion lately, with many users skeptical of the value generated by services like pump.fun and DexScreener. If this talking point persists, it would be highly bullish for Banana Gun. Banana Gun has recently released a brand new Solana bot, but may need a catalyst to lure users away from BullX and Trojan. Backlash against centralized, value extracting entities in favor of community owned projects has been a reliable narrative across cycles (Uniswap/Sushiswap, Curve/Swerve).

In order to achieve its next leg up, Banana Gun will need to carve out market share on Solana, or rely on alternative tailwinds such as its upcoming web app. A memecoin attention rotation back to Ethereum ecosystem could also spark a rally for BANANA, as it enjoys such a large moat in the EVM.