Author | defioasis
Editor | Colin Wu
Note: This article is intended for thought sharing only and does not constitute any investment advice.
The newly emerging Meme god Muard mentioned at Token2049 in Singapore that Crypto has entered a Memecoin Supercycle. This live video sparked widespread 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 Meme itself is truly recognized by the public, different investors likely hold different views, especially traditional investors who might see this as akin to gambling. This article will explore the investment value of Memecoins and the logic behind them based on personal observations and understanding of the Meme market.
Understanding the value of Memecoins from the perspective of attention
Memecoins are a manifestation of attention economy, representing the monetization of attention. Modern society is in an era of information overload, where attention has become an extremely scarce resource. Similar to when we browse TikTok or Twitter, people's attention gets dispersed in the continuous flow of massive information. Memes, through their unique cultural symbols, humorous expressions, and even fervent religious nature, successfully attract and consolidate public attention, while Memecoins are the monetization of this attention, linking public and market enthusiasm with capital flow and speculation.
The so-called success of Memecoin is not based on technology or application, or as Muard said in his speech about the Memecoin supercycle, Memecoin, this Token is a product, rather than issuing a Token because there is a product. This is also where Memecoins differ from other so-called value coins and governance tokens. As a product itself, 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, with public attention continuously accumulating, thereby attracting more users, short-term investors, and market speculators, even so-called market makers.
Secondly, the success of Memecoins is closely related to investors' FOMO (fear of missing out). During the dissemination process, Memecoins attract a lot of attention while accumulating FOMO psychology. When a Memecoin suddenly becomes a hot topic and its token price skyrockets, there is often a worry that investors might miss out on a huge investment opportunity. A prime example is BOME, which launched on Binance within three days.
Memecoin lifecycle
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 can collapse instantly. In response to this uncertainty, different investors have different strategies; the author broadly divides the lifecycle of Memecoins into three phases: PvP phase, consolidation phase, and the phase of listing on major exchanges.
In the PvP phase, which typically does not exceed the first three days after the birth of a Memecoin and may even be shorter than a few hours, investors usually hold a small position with a lottery mindset, entering and exiting the market quickly to seek short-term opportunities, generally suited for degen players. Degen players typically possess very strong short-term trading skills, adept at using various monitoring tools, and are highly sensitive, often staying up day and night to grasp opportunities that arise during the flow of attention. The simplest example is to catch Elon Musk's tweets or superstars' tweets, then use the keywords to scan the chain. The investment risk in the PvP phase is extremely high because once the focus of attention shifts or lacks sustainability, it is likely to evolve into a game of 'who runs faster.'
In the second phase, a long consolidation period after the end of PvP. Based on observations and personal thoughts on Memecoin investments, the author believes that an excellent Meme, or a Memecoin that can attract significant investment, is never just a game of speed; there will be ample time for ambush, and the community will have more time to settle down. During the consolidation phase, the initial intent and narrative of Memecoin hype will become the focus of investors. Memecoins with strong narratives and anti-imitation characteristics are more likely to regain market attention in the future. Additionally, support from secondary exchanges is an important signal, as it provides a significant venue for the introduction of market makers without needing to establish a new similar Memecoin from scratch.
The third phase involves listing on major exchanges such as Binance, Coinbase, and Upbit. This phase does not mark the end of a Memecoin's lifecycle but rather opens up an entirely new phase, entering the mainstream/secondary mainstream. Once listed on major exchanges, the safety of Memecoins can be said to be greatly improved, and there will no longer be such strong survival crises; instead, it will be more about waiting for the liquidity nurtured by a bull market.
Memecoin vs VCcoin
Compared to VCcoin, the reason why Memecoin has become a more mainstream investment method at this stage is simply the wealth effect. Other tracks and value coins are not profitable, while Memecoins are relatively profitable.
Since the beginning of this year, VCcoin has been criticized by many, which can be categorized into three main points. First, the squeezing of valuation space between primary and secondary markets; second, airdrop issues; third, narrative fatigue and repetitive wheel reinvention.
Firstly, high FDV and low circulation have caused great distress for secondary market investors. Most projects launched on major exchanges now have a market value of 1-2 billion after opening, with FDV in the tens of billions or even hundreds of billions. This is followed by constant unlocking pressure, leaving no room for secondary investors. A notable comparison is that the once-popular Stepn had a market value of only 100 million USD after launching on Launchpool, which increased 20 times to reach a market value of 2 billion. Nowadays, there are hardly any projects launching with a market value of only 100 million or less, and the heat generated by projects is far from that of Stepn.
Airdrops have become a very contradictory issue. Projects need the hype to raise valuations but are unwilling to distribute more chips to these users, as the essence of airdrops is to allocate tokens more to insiders or those who benefit insiders. For both project parties and large holders/institutions, retail investors are in a disadvantaged position. As the golden age of hype passes, the era where the public reaped considerable benefits is also over, with more studios and sybils; the relationship between project teams and retail investors/hype enthusiasts is deteriorating, and the benefits of hype are precarious. Rather than working hard without reward, itâs not surprising that people prefer to speculate in the Memecoin market.
The third pain point is narrative fatigue and lack of innovation. There is no essential difference in what various public chains are building; they are merely repeating the wheel. There are many infrastructures, yet there are hardly any applications.
Although Memecoins also have many so-called conspiracy groups hiding behind them, at least their relationship with users is not so antagonistic. Whether it's retail investors, project parties, or even so-called market makers, the common goal is to expand capacity. Most importantly, users have the opportunity to enjoy valuation space that has been squeezed by VCcoin; those in the primary market have the chance to benefit on-chain. Although the difficulty of obtaining this is constantly increasing, there is still hope, unlike VCcoin, which is completely squeezed with no opportunities at all. Of course, if you are a degen player, you can also PvP to earn a quick profit without needing to think too much about these issues.
Old Memecoin vs New Memecoin
If viewed solely from the perspective of attention, there is actually no significant difference in the development paths of old and new Memecoins. Even the largest market cap coin, DOGE, also saw price increases when it was frequently mentioned by Musk a few years ago. Now, old Memecoins that have been listed on major exchanges, due to their large size, do not require as much immediate attention to stimulate them, and the community is large enough to continuously attract external attention.
Of course, many different ways of playing with the new Memecoins have emerged. Firstly, the perspective of hype has become more diverse, truly becoming a situation where anything can be a Meme, no longer limited to cats and dogs, but also including zoos, earlier celebrity coins, political coins, and more recently, emoji coins. Even the holdings of superstars like Muard can become a focal point for speculation. Secondly, various pump tools have emerged, with low issuance costs, and the speed at which new Memecoins are created is increasing; anyone can issue them, and there are many with the same name, competing over timing and case sensitivity, with Memecoins competing against each other. Furthermore, competition among different chains is intensifying, with Solana and Ethereum being the most obvious, and earlier Base and Tron, as well as the recent Sui Memecoin, are all quite popular.
But essentially, it has not deviated from the framework of attention; it has merely undergone more dissemination differentiation and competition within this framework.
Envisioning the development direction of Memecoins
Vitalik once said that he sells ETH or has recently frequently sold the Memecoins given to him by the community to do charity. Thus, the role of Memecoins in supporting charitable causes might be an important development direction in the future. Memes themselves possess strong social dissemination abilities, so Memecoins might become a tool for funding social activities or charitable projects in the future. Based on this direction, the community is not merely about promoting or shouting slogans; it might evolve into a social charity organization to engage in offline charitable or caring activities.
Of course, the most important aspect of Meme or Memecoin is to maintain a certain purity, that is, simply to bring laughter, a form of joy. If it returns to building chains or applications, it seems to deviate from the original intent of Meme development. Of course, this is just my personal assumption and opinion.
