As a typical value investor, the first perspective when looking at cryptocurrency assets must be what user needs this product solves and what its business model is.
My consistent view on memecoin is that it is nothing. My prejudice has prevented me from getting a diamond hand even if I participate. However, the wealth effect of memecoin and the increasing number of people participating in it have prompted me to constantly reflect and look at what memecoin is.
If we use the four words "regulatory arbitrage" throughout the development of the entire cryptocurrency industry, it will be easier to understand why#memecoinmay be underestimated.
$BTC, regulatory arbitrage on payment networks.
$USDT, broader payment network regulatory arbitrage.
$ETH, regulatory arbitrage on asset issuance.
#memecoin , broader asset issuance regulatory arbitrage.
The broader regulatory arbitrage explained here
In Web2, the attention economy and intellectual property are combined. The IP you create is protected.
In Web3, we see memecoins based on popular IP packaging, memecoins issued based on characters, and memecoins issued based on hot memes. These memecoins combine with assets to generate economic benefits without being restricted by intellectual property rights.
By analogy, the release speed and quantity of short videos must be greater than those of long videos.
The issuance efficiency and quantity of attention assets must be greater than those of narrative-packaged value coins.
In the context of arbitrage dividends arising from the lack of regulation, memecoin can have more asset issuance narratives to support the motivation for issuing each token.
This is what people call "finding the angle" when it comes to fighting against local dogs.
This creates a constant stream of narratives that connect Web2 and Web3, including Internet narratives and Web3 Native memes.
This solves the problem of asset narrative and also solves the pain point of users as to what they are looking for.
The emotions are now in place
In a market with inward-looking liquidity, the old saying is that huge amounts of VC coins will be unlocked. The mainstream idea is that I am here to get rich quick, not to make a fortune.
This drives emotions and funds to look for low-market-cap tokens. The volatility is sufficient, and the hope for wealth is sufficient. If a small amount of funds loses a bet, they can immediately look for the next one. And because it is a small market value, it often has independent market trends.
At present, the overall market value of the meme sector is about 50 billion US dollars, of which $Doge $shib, the last round of mythical beasts, accounts for half of the FDV. The remaining memecoins add up to only more than 25 billion US dollars. This may only be 2-3 L2 FDV.
However, the entire memecoin sector can already generate billions of dollars in trading volume every day.
Funds are already in the sector. I think the overall growth potential of the track has not yet reached its peak.
Breaking circle effect
Looking back at the historical level of breaking the circle narrative in the cryptocurrency circle
$BTC has been unable to attract a wider range of people to join the wave of cryptocurrency. After the ETF was passed, we also saw that it was unable to bring first-hand liquidity overflow to the cryptocurrency circle.
The narratives of various assets issued by $ETH are no longer sexy, and the power of belief has become a joke, because those who believe have been hit hard by the unlocking of tokens.
$Doge, $shib, Gamefi, and NFT have helped the cryptocurrency circle gain a lot of attention from outside the circle at different stages.
GameFi has gradually withered due to its unsustainability and NFT has gradually withered due to its low liquidity. In this cycle, memecoin continues to develop further, from a vague sector track to a definite sector track.
And it still has a series of native attributes of the cryptocurrency circle, such as fair launch, small market value, high returns, regulatory arbitrage, etc.
In the coming market, it may be the only hope for the cryptocurrency circle to break out of the circle.
A track sector will give birth to many native players and ancillary infrastructure.
This may be something that VCs and old investors can understand better.
There are many ways to play memecoin:
There is a first-level dog-beating gameplay that focuses on short, flat and fast, event-driven,
Watching the group + watching social media + watching the chain is the core of this gameplay.
What we are playing is not taking over from each other, what we are playing is speed, emotion and enthusiasm.
"Sitting in silence" is exclusive to young people and dog beaters who are in good health.
There is an old dog gameplay that focuses on secondary takeovers,
Understanding community culture, immersing investment to join community co-construction, and advocating community construction, it feels like going back to 2017 to read project white papers and go to TG to ask the project party questions about how to implement the project.
It was called technical CX at that time, and now it is called Cult meme.
Culture and beliefs support prices.
It is more suitable for veteran investors, especially value investors.
There are also conspiracy groups, collective pump and dump,
Upper and lower case, forward and reverse, E chain, SOL chain, and so on.
The gathering is everywhere.
Because of the high threshold on the chain, more and more players need the help of corresponding infrastructure.
There is a convenient scanning chain viewing software
There is a channel for convenient wallet monitoring
TG BOT with fast transactions
etc.
Moreover, the money-making effect of the track in its early stage and the track itself, as well as its business model, have shown an overwhelming advantage over the mature business models in the cryptocurrency circle with the same team size.
You can go to Dune to see the daily income of each BOT.
With the money-making effect and fertile ground for construction, a track will not be without a source. Please help me revise this paragraph and try to make it more concise.
