Author | defioasis

Editor | Colin Wu

Note: This article is solely for thought sharing and does not constitute any investment advice.

Newly risen Meme guru Muard mentioned at Token2049 in Singapore that Crypto has entered the Memecoin Supercycle, and the live broadcast video sparked significant attention and sharing across the internet. In the crypto market, Memecoins have become an investment direction that cannot be ignored. However, whether the value of Memes is truly recognized by the public remains a question, as different investors likely hold different views, especially among traditional investors who may see it as akin to gambling. This article will explore the investment value of Memecoins and the logic behind it based on personal observations and understanding of the Meme market.

Understanding the value of Memecoins from the perspective of attention

Memecoin is a manifestation of the attention economy, a monetization of attention. Modern society is in an era of excessive information expansion, where attention has become an extremely scarce resource. Similar to when we scroll through Douyin or Twitter, people's attention gets dispersed among a massive flow of information. Memes, through their unique cultural symbols, humorous expressions, and even fervent religious nature, effectively attract and consolidate public attention, while Memecoins represent a monetization of this attention, linking the enthusiasm of the public and market with the flow and speculation of capital.

The so-called success of Memecoins is not based on technology or applications, or as Muard said in his speech on the Memecoin supercycle, Memecoin, this token is a product in itself, rather than launching a token because there is a product. This distinguishes Memecoins from other so-called value governance tokens. As a product, it relies on social media, especially the dissemination on Twitter and TikTok. When more and more people discuss the same Meme, this attention creates a snowball effect, accumulating public attention and attracting more users, short-term investors, and market speculators, even the so-called whales.

Secondly, the success of Memecoins is closely related to investors' FOMO (fear of missing out) psychology. During the dissemination of Memecoins, by attracting a lot of attention, it also accumulates FOMO mentality. When a Memecoin suddenly becomes a hot topic, and the token price skyrockets, there is often a sense of concern, as investors worry about missing out on a huge investment opportunity. A prime example is BOME, which launched on Binance and soared in price within three days.

Lifecycle of Memecoins

The essence of Memecoins is based on attention, which is extremely unstable. Therefore, the rapid shift of market attention also means that the value of Memecoins could collapse in an instant. In response to this uncertainty, different investors have different strategies; I will broadly divide the lifecycle of Memecoins into three stages: PvP stage, consolidation stage, and launch on top exchanges stage.

In the PvP stage, which typically does not exceed the first three days after a Memecoin's birth, and can even be shorter than a few hours. Investors usually have a small position lottery mentality, entering and exiting the market quickly to find short-term opportunities, generally suitable for degen players. Degen players usually possess very strong short-term operational capabilities, adept at using various monitoring tools, with high sensitivity, even staying up day and night, essentially grasping opportunities formed during the flow of attention. The simplest example is to catch Musk’s tweets, superkol’s tweets, and then after receiving the keywords, go scan the chain. The investment risk in the PvP stage is extremely high, as once the focus of attention shifts or lacks sustainability, it is likely to evolve into a game of 'who runs faster.'

In the second stage, after PvP ends, there is a longer period of consolidation. Based on observations and my own thoughts on Memecoin investments, I believe that an excellent Meme, or a Memecoin that can enter with a larger position, is never just a game of speed; there will be enough time to ambush, and the community will also have more time to settle. In the consolidation stage, the initial purpose of Memecoin speculation and its narrative will become the focus of investor attention. Some Memecoins with strong narratives and anti-imitative qualities are more likely to regain market focus in the future. Additionally, support from second-tier exchanges is an important signal, as it provides a crucial venue for market makers' entry without needing to start a new similar Memecoin from scratch.

The third stage is launching on top exchanges, such as Binance, Coinbase, and Upbit. The third stage does not mark the end of the Memecoin lifecycle, but rather opens a whole new phase, entering mainstream/sub-mainstream. Once launched on top exchanges, the safety of Memecoins can be said to be greatly enhanced, and there will no longer be such a strong survival crisis, but rather wait for the nurturing of liquidity in a bull market.

Memecoin vs VCcoin

Compared to VCcoin, Memecoins have become a more mainstream investment method at this stage, simply put, due to the wealth effect. Other sectors and value coins are not profitable, while Memecoins are relatively profitable.

Since the beginning of this year, VCcoin has been frequently criticized, which can be categorized into three major points. First, the squeeze of valuation space between primary and secondary markets; second, the airdrop issue; third, the fatigue of narratives and the repetitive wheel reinvention problem.

First, high FDV and low circulation volume leave secondary market investors in distress. Most projects launched on top exchanges now have a market cap of 1-2 billion after opening, with FDVs reaching tens of billions or even hundreds of billions. This leads to constant unlocking and selling pressure, leaving no room for secondary investors. A significant contrast is that the once-popular Stepn had a market cap of only 100 million dollars after launching on Launchpool, rising 20 times to reach a market cap of 2 billion. Now, there are hardly any projects that launch with a market cap of only 100 million or less, and the hype that projects can generate is far from that of Stepn.

Airdrops have become a highly contradictory issue. Projects need the pumpers to raise their valuation, but are unwilling to distribute more chips to these pumpers because airdrops essentially allocate tokens more to insiders or those beneficial to them. Whether for the project parties, large holders/institutions, or even exchanges, retail investors are in a disadvantaged position. With the golden era of pumping fading away, the time when the public reaped substantial rewards has also passed. Studios and sybil accounts are increasing, the relationship between projects and retail/pumpers is deteriorating, and the profitability of pumping is in jeopardy. Rather than putting in effort without reward, it’s no wonder that many prefer to speculate in the Memecoin market.

The third pain point is the weak narrative and lack of innovation. Various public chains do not differ fundamentally in what they build, they are all just reinventing the wheel. There is a lot of infrastructure, but few applications.

Although Memecoins also have many so-called conspiracy groups hidden beneath them, at least their relationship with users is not so antagonistic. Whether retail investors, project parties, or even the so-called whales, their common goal is to expand capacity. Moreover, the main point is that users have the opportunity to enjoy the valuation space that has been squeezed by VCcoin, where those in the primary market can have the chance to obtain value on-chain. Although the difficulty of obtaining value is increasing, there is still hope, unlike VCcoin, which has been completely squeezed out with no opportunity at all. Of course, if you are a degen player, you can also make some quick profits in PvP without having to think too much about these issues.

Old Memecoin vs New Memecoin

If we only look at it from the perspective of attention, the development paths of new and old Memecoins are actually not much different. Even the largest market cap DOGE, which was frequently promoted by Musk a couple of years ago, also saw some increase. Now, older Memecoins that have launched on top exchanges do not need as much instantaneous attention to stimulate their growth, and their communities are large enough to continuously attract external attention.

Of course, new Memecoins have birthed many different ways to play. Firstly, the perspective of speculation has become more diverse, truly becoming that everything can be a Meme, no longer limited to cats and dogs, but also extending to zoos, earlier celebrity coins, political coins, and recently emoji coins; even the holdings of superkols like Muard can become angles for speculation. Secondly, various pump tools have emerged, with low issuance costs, and the speed of new Memecoin births has increased, with many being launched under the same name, leading to competition between Memecoins and even between different chains, where Solana and Ethereum are the most obvious, along with earlier Base and Tron, as well as the recently popular Sui Memecoins.

But essentially, they have not escaped the framework of attention; rather, they have undergone more dissemination differentiation and competition within this framework.

Envisioning the development direction of Memecoins

Vitalik has said that he sells ETH or has recently frequently sold the Memecoins that the community gave him, for charity. The role of Memecoins in supporting charitable causes could be an important direction for future development. Memes have powerful social dissemination capabilities; Memecoins may become a tool for funding social activities or charitable projects in the future. Based on this direction, the community may evolve into a social welfare organization, engaging in offline charity or love initiatives.

Of course, the most important aspect of Memes or Memecoins is to maintain a certain purity, purely to evoke laughter, a kind of joy. If it returns to building chains or applications, it seems to deviate from the original intention of Meme development. Of course, this is just my personal speculation and viewpoint.