Author | defioasis

Editor | Colin Wu

Note: This article is only a sharing of thoughts and should not be considered as any investment advice.

The new Meme master Muard mentioned at Token2049 in Singapore that Crypto has entered a Memecoin Supercycle, and the live video sparked a lot of attention and sharing across the internet. In the crypto market, Memecoin has already become an investment direction that cannot be ignored. However, whether the value of Meme itself is truly recognized by the public, different investors likely still hold different views, especially traditional investors who may see it as akin to gambling. This article will explore the investment value of Memecoin and the logic behind it based on personal observations and understanding of the Meme market.

Understanding Memecoin value from the perspective of attention.

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

The so-called success of Memecoin is not built on technology or applications, or as Muard said in his speech at the Memecoin supercycle, Memecoin is a product in itself, rather than issuing a Token because there is a product. This is what differentiates Memecoin from other so-called value coins or 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, accumulating public attention, thereby attracting more users, short-term investors, and market speculators, even so-called 'whales'.

Furthermore, the success of Memecoin is closely related to investors' FOMO (Fear of Missing Out) psychology. During the dissemination of Memecoin, by attracting a lot of attention, it is also accumulating FOMO psychology. When a Memecoin suddenly becomes a hot topic and the token price skyrockets, there is often a concern that investors might miss a huge investment opportunity. The best example of this is BOME, which went live on Binance three days after launch.

Memecoin lifecycle

The essence of Memecoin is based on attention, and attention is extremely unstable. Therefore, the rapid shift of market attention also means that the value of Memecoin may collapse instantaneously. In response to this uncertainty, different investors have different strategies. I generally categorize the lifecycle of Memecoin into three stages: PvP stage, consolidation stage, and listing on top exchanges stage.

In the PvP stage, which usually does not exceed the first three days after the birth of a Memecoin, or even lasts shorter than a few hours. Investors typically approach it with a small position lottery mentality, entering and exiting the market quickly to seek short-term opportunities, which is generally suitable for degen players. Degen players usually have very strong short-term operational capabilities, are adept at using various monitoring tools, are highly sensitive, and even turn their days and nights upside down, essentially capturing opportunities formed during the flow of attention. The simplest example is catching Musk's tweets, the tweets of superkols, and then scanning the chain after obtaining keywords. The investment risk in the PvP stage is extremely high, as once the focus of attention shifts or lacks sustainability, it is very likely to evolve into a game of 'who runs faster'.

In the second stage, after the PvP phase ends, there is a long consolidation period. Based on observation and my own thoughts on Memecoin investment, I believe that an excellent Meme or a Memecoin that can enter with a significant position is never just a game of speed; there will be enough time to ambush, and the community will have more time to settle. During the consolidation stage, the original intent and narrative of Memecoin speculation will become the focus of investors. Memecoins with strong narratives and imitation resistance are more likely to regain market attention in the future. Additionally, support from secondary exchanges is an important signal as it provides a crucial venue for market makers without the need to start anew with a similar Memecoin.

The third stage is the listing on top exchanges, such as Binance, Coinbase, and Upbit. The third stage does not mark the end of the Memecoin lifecycle; instead, it will open a whole new phase, moving into mainstream/sub-mainstream. After being listed on top exchanges, the safety of Memecoin can be said to be greatly improved, and there won’t be such a strong survival crisis, but more of a waiting for the liquidity of a bull market.

Memecoin vs VCcoin

Compared to VCcoin, the reason Memecoin has become a more mainstream investment method at this stage is simply the wealth effect. Other sectors and value coins are not profitable, while Memecoin is relatively profitable.

Since the beginning of this year, VCcoin has been widely criticized and can be categorized into three main points: first, the squeeze in valuation space between primary and secondary markets; second, the airdrop issue; and third, the narrative fatigue and the problem of reinventing the wheel.

First, high FDV and low circulation make secondary market investors suffer. Most projects that are launched on top exchanges now have a market value of 1-2 billion after opening, with FDV in the tens or even hundreds of billions. They then face continuous unlocking and selling pressure, leaving no space for secondary investors. A notable contrast is that the once-popular Stepn had a market cap of only 100 million dollars after its Launchpool opening, and it increased 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 generated by projects is far from that of Stepn.

Airdrops have become a very contradictory issue. Projects need the 'farming' community to raise valuations but are unwilling to distribute more tokens to these users, as airdrops essentially allocate tokens more to insiders or those who are beneficial to insiders. Whether for project parties, large holders/institutions, or exchanges, retail investors are in a disadvantaged position. As the golden age of farming passes, the era where the public could reap substantial benefits has also ended. With more studios and sybils, the relationship between project parties and retail/farming users is deteriorating, and the rewards from farming are precarious. Rather than exerting effort without reward, it’s understandable that people prefer to speculate in the Memecoin market.

The third pain point is the narrative fatigue and lack of innovation. The various public chains are not fundamentally different in what they construct; they are just reinventing the wheel. There is a lot of infrastructure, but very few applications. Reinventing the wheel is essentially a continual fragmentation of liquidity.

Although Memecoin also has many so-called conspiracy groups hiding behind the scenes, at least their relationship with users is not so confrontational. Whether it is retail investors, project parties, or even the so-called whales, the 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. Those in the primary market have the chance to obtain it on-chain. Although the difficulty of acquisition is continuously increasing, there is still hope, unlike VCcoin, which is completely squeezed with no opportunities. Of course, if you are a degen player, you can also make a quick profit in PvP without needing to think too much about these issues.

Old Memecoin vs New Memecoin

If we look only at the perspective of attention, the development paths of new and old Memecoins are actually not very different. Even the largest market cap DOGE, which was often hyped by Musk a couple of years ago, experienced some increase. Now, old Memecoins that have been listed on top exchanges do not require as much instantaneous attention to stimulate their growth because their size is substantial enough, and their communities are large enough to continuously attract external attention.

Of course, many different ways of playing new Memecoins have emerged. First, the perspective of speculation has become more diverse, truly becoming a case where everything 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 superkols like Muard can become a perspective for speculation. Secondly, various pump tools have emerged, the cost of issuing coins is very low, and the speed of new Memecoin emergence is rapidly increasing. Everyone can issue coins, many with the same name, competing in terms of timing, case sensitivity, and Memecoin competing with each other. Additionally, competition between different chains is intensifying, with Solana and Ethereum being the most obvious, along with earlier Base and Tron, and recently Sui Memecoin becoming very popular.

But fundamentally, they have not deviated from the framework of attention; they are just engaging in more dissemination differentiation and competition within this framework.

Imagining the development direction of Memecoin

Vitalik has said that he sells ETH or frequently sells Memecoin that the community has given him to do charity. The role of Memecoin in supporting charitable causes may become an important development direction in the future. Meme itself has strong social dissemination capabilities, so Memecoin may become a tool for funding social activities or charitable projects in the future. Based on this direction, the community may not simply engage in grassroots promotion or shouting slogans, but may evolve into a social charity group to conduct offline charity or love movements.

Of course, the most important thing about Meme or Memecoin is to maintain a certain purity, simply to make people laugh, a source of joy. If we return to building chains and applications, it seems a bit contrary to the original intent of Meme development. Of course, this is just my personal speculation and viewpoint.