# Market Problems

Meme launches on new chains usually try to do three jobs at once: discover a price, levy a trading tax, and promise some form of yield. Those jobs are rarely written as verifiable identities. Holders pay a spread, then cannot say where the tax went, or which on-chain path the yield used.

MicroTape's judgment sits on three failures that keep repeating. Those judgments become [Design Goals](/goals). How this launch sits next to live designs is [Comparison](/comparison).

```mermaid
%%{init: {"theme":"base","themeVariables":{"primaryColor":"#1a120c","primaryTextColor":"#f5ede4","primaryBorderColor":"#953307","lineColor":"#f46622","secondaryColor":"#221710","tertiaryColor":"#120d09","edgeLabelBackground":"#120d09","noteBkgColor":"#221710","noteTextColor":"#f5ede4","noteBorderColor":"#953307","actorBkg":"#1a120c","actorBorder":"#953307","actorTextColor":"#f5ede4","signalColor":"#f46622","signalTextColor":"#f5ede4","fontFamily":"inherit"}}}%%
flowchart TD
  Launch["Meme launch"]
  Launch --> Price["Price discovery"]
  Launch --> Tax["Trading tax"]
  Launch --> Yield["Yield story"]
  Price --> Identity["Identities rarely written"]
  Tax --> Identity
  Yield --> Identity
  classDef hot fill:#f46622,stroke:#f46622,color:#120d09
  classDef dim fill:#120d09,stroke:#3a2416,color:#b9a693
  class Launch hot
  class Identity dim
```

## Extractive taxes

A taxed transfer turns every fill into a spread. Common destinations are a marketing wallet, a team address, or a reflection back into the same token.

Reflection keeps the tax inside the holder set. It does not introduce an exogenous asset. When the price falls, the reflection falls with it. If the tax is paid to a wallet that can withdraw, the tax is a skim.

For a trader both forms are a wider bid-ask. The only difference is the payee. If that payee can leave, or if the "yield" is a reshuffle of the same token, the tax has no production function.

## Rented liquidity

LP hired with short incentives leaves when the incentives end. LP that a team can still withdraw adds a unilateral exit on top of that. Post-Olympus writing calls this rented liquidity: the protocol pays, ownership stays outside.

Inner curves in the Four.meme / Pons family solve price discovery. If graduation then sends LP to an address the team controls, discovery and a depth commitment are still two different things. Finishing the inner book does not, by itself, create irreversible outer depth.

That gap is expensive for memes. Books are thin, information is asymmetric, exits are fast. LP without a commitment device is not a premise for a treasury or a dividend.

## Endogenous yield versus exogenous yield

Many books pay "yield" in the same token. Inflation, reflection, and buyback-and-burn use different ledgers. The cash flow still lands on that token. The APY the holder sees and the token price are one risk.

Another class writes yield as an off-chain promise or an unverifiable strategy. The number on the page cannot be rebuilt from contract events.

A verifiable dividend needs three separate objects: a means of payment, an exogenous asset, and an on-chain path that turns the first into the second. Missing any one, yield is still a story.

```mermaid
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flowchart LR
  Pay["Means of payment"] --> Path["On-chain conversion"]
  Asset["Exogenous asset"] --> Path
  Path --> Div["Verifiable dividend"]
  Pay -.->|missing| Story["Narrative yield"]
  Asset -.->|missing| Story
  Path -.->|missing| Story
  classDef hot fill:#f46622,stroke:#f46622,color:#120d09
  classDef dim fill:#120d09,stroke:#3a2416,color:#b9a693
  class Div hot
  class Story dim
```

## Judgment

Community trading can form a tax base first. The protocol can turn that tax base into capital goods it can no longer unwind. The output of those goods must be another asset that already exists, not an inflation of the meme.

Graduation depth must leave every owner. Otherwise tax and dividends sit on a pool that can still be pulled.

These judgments are not forecasts of volume or price. They only constrain what the mechanism is allowed to do. Implementation: [Design Goals](/goals). Loop: [Flywheel](/loop).