On November 29, 2024, 137Labs and Golden Finance jointly held a highly anticipated X Space event with the theme of [Meme cooling, Bitcoin callback, and market return to rationality after the phenomenon of discussion]. The event invited many well-known guests in the crypto industry, including SunflowerLabs co-founder Mr. Bai, 137Labs researcher Oneone, independent researcher Ningning, and crypto industry practitioner Dale, to discuss the market phenomenon of Meme coins, the reasons for success and failure, and their future direction in the crypto ecosystem.
During the event, the guests conducted an in-depth discussion on the origin and evolution of Meme coins, from the early Zoo to the current rise of emerging tokens such as Pnut, and analyzed why Meme coins could detonate the market in a short period of time and why they declined rapidly. The guests also discussed the low-threshold coin issuance mechanism of the Pumpfun platform and the regulatory issues it brought, further compared Solana's performance in the Meme track, and made an in-depth interpretation of Musk's announcement that the X platform will open online remittances, and discussed the possible impact of this move on the Web3 industry.
This article will take you back to this inspiring conversation, dig deep into the root causes behind the Meme coin phenomenon, and explore how Web3 projects can balance user growth and healthy operations and find a path to sustainable development in a turbulent market.
Q1
The once popular meme craze has subsided, "conspiracy groups" are setting up schemes, scientists are beating up ordinary retail investors, PvP is a mess, and Christmas tree candlesticks are everywhere... CZ once said that he "is not against memes, but meme coins are now becoming 'a bit' strange, and I hope to use blockchain to build real applications." What do you think of these meme phenomena? What are the reasons for these phenomena? Is the meme cycle over?
Oneone reviewed the early stages of Memecoin in 2021, such as the prevalence of the Zoo project, when the market was dominated by a pure PvP model, and retail investors competed with each other, whoever sold early would make a profit, and whoever sold late would be cut. As the market's understanding of the Memecoin mechanism deepened, "Smart Money" began to appear, using layout and hype to manipulate the market, but later due to the increasing complexity of the operation, the benefits of tracking Smart Money also began to decrease.
He mentioned that the rise of the scientist group was initially due to the high technical threshold, which required the ability to build nodes and write code, but now with the popularization of tools, it has become easy to deploy robots and track transactions on the chain, and retail investors can also participate. The popularization of this technology has accelerated the decline of the popularity of Meme coins and the shortening of their life cycle.
Regarding whether the cycle of Meme coin has ended, Oneone said that Meme does not have a fixed cycle. It can suddenly appear at any moment in the bull market or bear market, so it is not valid to talk about the end of the cycle.
Ningning said that the meme coin craze is not a new phenomenon. The last round of the market also experienced a similar cycle, but at that time there were more altcoins based on Bitcoin forks. For example, Dogecoin and Shiba, as the remaining "monsters" of the last round, have emerged in this round, such as Pepe coin and Pnut. Ningning believes that the so-called "super cycle" is an excessive statement to attract attention, and Meme coins are more like a normal phenomenon in the market, a cyclical phenomenon, which is manifested in surpassing VC coins for a period of time, but it does not exist forever.
He also pointed out that the form and structure of Meme coins have changed, especially with the birth of Pumpfun, the issuance and liquidity threshold of Meme coins have been greatly reduced, leading to the outbreak of a large number of new coins. At the same time, the main force of this round of Meme coins has shifted from those born in the 1980s and 1990s to those born in the 2000s and 2010s, and their changes in aesthetics and values have affected the market trend.
As for whether Meme coins will disappear completely, Ning Ning thinks that they will not. Meme coins still meet people's needs for getting rich quickly and rewards brought by high volatility. Although they are currently in a dormant period, Meme coins may make a comeback after the VC coin cycle ends.
Mr. Bai said that although the craze for Meme coins will decline, it will not completely fade away and will always exist. The cyclical performance of Meme coins is different from other crypto assets, especially when Bitcoin leads the market, Meme coins always exist and will continue to be active as long as there is a hot spot in the market. He believes that this is related to human greed, and investors tend to follow the rising hot spots, even if they know that these coins may eventually return to zero.
Mr. Bai pointed out that the form and structure of Meme coins will continue to change. As the market continues to evolve, Meme coins will gradually introduce new elements (such as music, live broadcasts, etc.), which may not be truly empowering, but the market still accepts them. He believes that Meme coins will eventually become part of a sector rather than disappear completely.
He also mentioned that the end of Meme coin may be to integrate into the mainstream altcoin market and become an investment target that is in line with the overall market trend. Meme coin will not disappear, but may be temporarily silent when capital flows to other areas, but its essence is still based on human needs: getting rich quickly and a highly volatile reward mechanism.
Mr. Bai also added that there is a certain correlation between Meme coin and Bitcoin. He believes that if Meme coin is incorporated by exchanges or becomes part of a sector, its trend will be related to Bitcoin, and may even be positively correlated with Bitcoin's trend. Because Bitcoin has a strong consensus foundation and has accumulated a lot of trust over a long period of time, if Meme coin eventually becomes part of the mainstream sector, its market may follow the trend of Bitcoin.
He further analyzed that if Meme coin operates independently without any connection to mainstream institutions or Bitcoin, it will follow its own independent trend. Especially after Bitcoin breaks through a new high, Meme coin may lag behind Bitcoin, and funds may also shift to other areas. However, if Meme coin is recognized by institutions and becomes part of the sector, its trading methods will be affected and it will not be able to continue to operate independently. It may eventually converge with the trend of Bitcoin or other mainstream currencies.
Q2
Driven by profit, users of the Pump fun platform have been violating regulations by live-streaming and issuing coins, and even organizing groups to hunt users. The abnormal development of Pump fun has attracted supervision. From the most popular and highly profitable Meme platform in web3 to attracting supervision, what do you think are the success and failure of Pump? What is the reference value for other web3 projects? How can Web3 projects balance user acquisition and healthy operations?
Mr. Bai mentioned in his answer that the promotion method of the Pumpfun platform has positive significance, especially in attracting new users. He believes that whether it is positive or negative means, as long as it can bring new users, especially allowing more people to get in touch with Bitcoin, it is a good thing. But the problem is that Pumpfun has already seen a lot of extreme and improper behaviors, such as inappropriate live broadcast content and extreme hype, which puts the platform under regulatory pressure.
He pointed out that although the platform's goal is to attract user attention and participation by attracting traffic, excessive hype and unhealthy behavior patterns will bring serious risks. Once these issues are intervened by regulators, the decentralized nature of the platform may be threatened, making it impossible to achieve its original goal. He mentioned that this is a paradox. The platform wants to attract more traffic, but at the same time it must avoid violations, otherwise it will face regulatory challenges.
Mr. Bai also emphasized that one revelation of the Web3 project is that when changing the traditional coin issuance model, attention must be paid to how to balance traffic acquisition and healthy operations. Although changing the coin issuance model can bring short-term investment opportunities, excessive hype and irregular behavior may eventually damage the sustainable development of the project. Therefore, the Web3 project needs to find a balance point that can attract users while maintaining healthy operations.
Oneone analyzed the low-threshold coin issuance mechanism of the Pumpfun platform, pointing out that this lowered the threshold for coin issuance, making it easy for celebrities, KOLs and ordinary users to participate, and promoting market activity. However, this mechanism also brought problems. Many people posted spoofs and vulgar content to attract attention, resulting in a decline in the quality of platform content and the phenomenon of "bad money driving out good money".
Oneone believes that proper regulation is crucial for the healthy development of the platform. He mentioned the example of Kuaishou, whose content got out of control in the early days, leading to its later overtaking by Douyin. If Web3 platforms ignore content management, they may suffer a similar fate, or even be hit by regulators.
He also stressed that Web3 projects should abide by the law, morality and human ethics, and should not abandon moral standards for short-term interests. Although innovation and profit models can be explored, we must maintain awe of the law and morality to prevent the platform from falling into an irreversible abyss.
Q3
When we talk about Pump, we have to mention Solana. Solana's performance in this round of bull market can be described as a hot fried chicken. Not only does it have excellent coin price performance, but it has also attracted a large number of users in the Meme track. The transaction volume is as high as 59% of the total Dex transaction volume of the entire network. At the same time, Solana ETF has also been officially submitted. Solana's development in this round can be described as a multi-dimensional attack, with both ecological prosperity and ETF trends not falling behind.
Dale believes that Solana's current performance is similar to Ethereum's stage from 2020 to 2021, which experienced a similar market boom and price increase. He pointed out that Solana is currently in the second stage, that is, the rapid development of the on-chain ecosystem, similar to Ethereum's past experience. Solana's technology and low gas fees are no longer the main points of controversy, but more about its strong team and investment background.
Dalue specifically mentioned that there is strong investment support behind Solana, especially Jump Capital, which invests in Solana and provides resources for it. This gives Solana a significant financial advantage. In addition, Solana's marketing strategy is also very good, especially in 2023, by recruiting community ambassadors globally and promoting Web3 developers and users, it successfully attracted a large number of new users and developers.
He believes that through these means, Solana has attracted traffic and funds, promoted the prosperity of its ecology, and achieved remarkable results, becoming the leader in the current market.
Ningning mentioned that Solana's success is closely related to its strategy. Solana has successfully attracted a large number of users by vigorously promoting Meme coins, especially projects such as PumpFun, and in this way has changed the market structure and attracted Ethereum users to Solana. Solana has surpassed Ethereum in terms of on-chain data, transaction volume, and transaction size, although Ethereum is currently working hard to find new strategies.
Ning Ning believes that Solana's success lies in its insistence on high-performance expansion, unlike Ethereum, which chooses parallel expansion. Solana does not rely on L2, but focuses on the expansion of L1, maintaining technical independence. In contrast, although Ethereum's L2 solution was well-intentioned, it encountered fragmentation problems during implementation, resulting in poor user experience and the failure of some L2 projects. Solana therefore seized this opportunity and successfully challenged Ethereum.
Ning Ning thinks Solana's ETF is not that important. He believes that Bitcoin's ETF plays an important role in improving its financial liquidity and value storage function, but for Ethereum and Solana, ETFs have limited impact on their market performance because their native tokens are mainly used for applications rather than as currencies.
Oneone believes that Solana has performed very well in this round of bull market, attracting a large number of users, and the price of the currency has performed well. He believes that Solana's rise is not fundamentally different from the previous round. The key is that Solana's mechanism is different from the EVM chain, especially in terms of MEV. Solana users did not have the trouble of MEV before Jupiter, which greatly enhanced its appeal. At the same time, Solana is highly sensitive to market changes and can launch projects such as PumpFun when market liquidity is good, and introduce external projects such as Depin when liquidity is poor, so as to flexibly respond to the market environment.
However, Oneone pointed out that Solana cannot overcome Ethereum's core advantages, especially in terms of security. Solana's multiple downtime issues make it impossible to surpass Ethereum in security unless it changes the consensus mechanism, but doing so may cause changes in the nature of the chain. Solana has performed well in the past bull market, partly due to the market's sensitivity, but Oneone believes that Solana will find it difficult to surpass Ethereum in the future, especially in terms of market value and ecological scale. Even if Solana's price rises significantly, its TVL is still far behind Ethereum. Oneone believes that Solana's profit and loss ratio is not ideal. Although there are opportunities to make money in its ecosystem, it is not recommended to hold a large position in Solana.
Q4
Musk announced that X will open online remittances. As the largest social media hub in the crypto community, what impact do you think this will have on any specific track in the web3 community?
Ningning believes that Musk's announcement that X will open online remittances is not new, and similar narratives were hyped as early as the spring of 2023. At that time, the market formed a sector around the concept of "X payment", which included tokens related to the Signal protocol and Doge, and Doge was even seen as a possible preferred payment currency. If X payment is still based on the Signal protocol, this news may bring a brand effect, further increase the exposure of the crypto industry among traditional people, and bring benefits to related concept coins.
Ning Ning also mentioned that X payment may involve the integration of stablecoins. For example, PayPal, which Musk co-founded, has launched its own stablecoin PYUSD, which may become the main token in X payment. In addition, X may also adopt other stablecoin protocols or other similar interest-bearing stablecoins. This will be a substantial benefit to the relevant stablecoin protocols and bring more usage scenarios and market recognition to these projects.
Dale’s answer is that the biggest impact of Musk’s announcement that X will open online remittances is cross-border payments. He mentioned that one of the keys to PayFi and related information tracks is to solve the problem of cross-border payments. This move by X can solve the pain points of cross-border payments in traditional finance and therefore may have a significant impact on these areas.
However, Dale also stressed the importance of the market, pointing out that the ultimate success depends on market acceptance. Although this initiative seems to have potential, whether the market recognizes and accepts this new payment solution is the key. Only when the market accepts them can they be regarded as truly successful.
Q5
Meme leader Dogecoin is not just a meme, but also backed by Musk. The US government efficiency department established after Trump's election is abbreviated as "DOGE". Is all this a coincidence or intentional? Please analyze the basis for Dogecoin as an investment target from different dimensions.
Dale believes that the rise of Dogecoin is not only due to Musk's hype, but also involves the cyclical fluctuations of market sentiment. He reviewed the performance of Dogecoin in 2021, pointing out that although the market had expected it to be worth $1 or even higher, it ultimately failed to achieve its goal, which shows that the price of Dogecoin is more dependent on market hype than fundamental support. He believes that the "DOGE" department established by the Trump administration is a typical hype behavior. Although it may bring short-term popularity, whether it can be maintained in the long run still needs to be verified by the market. The current market value of Dogecoin is close to 100 billion US dollars. Although there may still be room for hype, Dale reminds that investors should be cautious, especially when making long-term investments, because its high market value may limit its short-term gains, and assets that rely on hype have greater volatility risks.
Oneone believes that Dogecoin is deeply influenced by Musk's unique personal charm and spoof spirit. He pointed out that Musk is a very abstract character. Oneone believes that Musk's promotion of Dogecoin also has a similar spoof and joke nature. Although he holds a large number of Dogecoins and makes profits from them, it is more out of personal interest rather than a serious investment decision of a traditional entrepreneur. Therefore, when the Trump administration's department was named "DOGE", it is also likely that Musk used this to further enhance the attention of Doge, reflecting his personalized style, rather than just a coincidence. Overall, Oneone believes that this behavior reflects Musk's personal characteristics more than a pure business strategy.
Q6
The market is gradually returning to rationality. What good value targets may emerge? Which tracks or sectors have you laid out?
Dale mentioned in his answer that after the market gradually returns to rationality, some value targets may still "go out of the circle", especially those projects with cyclical characteristics, which still have the potential to rise. For old meme tokens, although they have experienced fluctuations, if they continue to be hyped, they still have the opportunity to rise.
In addition, he mentioned the opportunities in the public chain field. Although Solana once performed well, Ethereum is still the "king of meme public chains" because the meme tokens it supports have the highest market value. For new public chain projects, he mentioned some projects that have recently emerged in the market, such as Sui and Base, which may become potential stocks in the future.
He also mentioned the AI-related track, believing that investment opportunities in the AI field are still strong. AI-related meme tokens like ACT, although they have both meme and AI attributes, may usher in greater hype opportunities in the future.
In terms of the game track, Dale said that although the game sector has experienced a wave of enthusiasm, there are no "explosive" games that lead the industry in the market. However, he believes that with the hype and cyclical changes in the market, new explosive game projects may appear in the future.
Ningning believes that the development of AI technology is still in its early stages, and many existing AI applications are still in the "geek" stage and cannot fully meet the needs of C-end users. However, AI has great potential, and he pointed out that many top companies (such as OpenAI and Microsoft) are saying that 2025 will be the year of AI, which means that truly usable AI applications may be put into practical use in the next few years, driving industry changes.
In the field of blockchain, Ning Ning is optimistic about the prospect of combining AI and encryption technology, and believes that this is an opportunity that cannot be missed, especially in the field of crypto assetization. He pointed out that most of the AI applications on the market are still in the narrative stage, but as the technology matures, these applications may bring huge growth potential, especially AI applications in the field of encryption.
Regarding meme tokens, Ning Ning’s view is to avoid investing in tokens with a market value of less than $1 million, and focus on meme tokens with a larger market value, active communities and good trends. He believes that although meme tokens are still full of hype and speculation, they are still an opportunity to dig up wealth.
Finally, Ning Ning mentioned an emerging crypto-financial application, namely P2P financial management. He said that some crypto platforms are attracting local US users to store funds through high interest rates, and these funds are converted into stablecoins or DeFi financial products. He believes that this decentralized financial APP model has unique advantages over traditional finance, especially in the future bull market cycle, such platforms may usher in another glory.
Oenone believes that when choosing an investment track, one must first ensure that the track is in line with one's own logic. He uses the "slot machine theory" as a metaphor, meaning that in a successful market or platform, he would rather invest in the platform itself than directly conduct high-risk operations in the market, because the probability of success of the investment platform is higher.
In addition, Oenone also focuses on DeFi tokens with strong externalities and perfect business models. He believes that these tokens can provide liquidity benefits when the overall market is undervalued, rather than simply relying on the rise and fall of a certain project. Such tokens usually have a robust profit model and can make profits through the liquidity of the entire market, rather than relying on the performance of a single project.
Finally, Oenone's investment approach places great emphasis on diversification. He will invest in multiple tracks, including meme tokens, DeFi, and mainstream blockchains (such as Ethereum). However, he emphasizes the importance of position management, and the proportion of capital investment in each track is different. Through this strategy, risks can be dispersed in different market cycles, balancing potential returns and risks.
Conclusion
Through the in-depth discussion of this X Space, the guests analyzed the rise and fall of Meme coins and the driving factors behind them from multiple dimensions. From market sentiment, technology popularization to platform innovation, the participants revealed the root causes of the Meme coin craze and its possible future direction. At the same time, the discussion on how Web3 projects balance user acquisition and healthy operations, the rise of Solana, and the new opportunities brought by Musk X platform all provide valuable insights for industry practitioners. In this rapidly developing market, understanding technological evolution, examining investment risks, and following the trend will be the key to seizing opportunities and achieving sustainable growth.
The article is for sharing and communication only and does not constitute investment advice.
