First Trump sold NFTs, and then Jenner, the eldest dad of the Kardashian family, opened Pump.fun to sell Meme coins... The last time celebrities from all walks of life rushed into the crypto industry was the NFT craze from 2021 to 2022; and now, just like the "everything can be NFT" in the past, the Meme coin craze is expected to take over NFT and become a new battlefield for countless celebrities, celebrities, KOLs, anonymous teams, etc. to open and reap the rewards.
This article provides a brief comparative analysis of Meme Coin and NFT for readers’ reference.
Analysis of common points: Are Memecoin and NFT twin brothers?
We have mentioned that Meme coins originated from POW coins after Bitcoin. DOGE, which was born in 2013, is generally regarded as the "first Meme coin", even earlier than the emergence of NFT. Therefore, based on the similarities between the two, in terms of time, Meme coins are the "older brother" and NFT is the "younger brother". In detail, the two have similarities mainly in the following aspects:
The starting point is similar: from the community, to the community
When it comes to the primary commonality between Meme coins and NFTs, community attributes are undoubtedly ranked first.
Whether it is old-fashioned Meme coins such as DOGE and SHIB, or rising stars such as PEPE and WIF, or NFT OG projects such as Cryptopunks and BAYC, as well as Pudgy Penguin, Azuki, and Weirdo Ghost Gang, these NFT leading projects that are constantly exploring the field of IP operations, a strong and united community is indispensable at the starting point of a project and during its subsequent development.
This is also one of the reasons why many NFT players are able to quickly integrate into the project after starting to play Meme coins, because a good project, whether it is the community atmosphere or the cultural aesthetics, is relatively consistent. Whether it is like-minded or just like-minded, people can always play together to form a community.
Symbols of similarity: from zoos to celebrities
The symbols of Meme coins and NFTs are also a major common point between the two. Whether it is zoo symbols such as dogs, cats, mice, monkeys, frogs, pandas, penguins, or celebrities such as Trump, Kanye West, Coinbase CEO Brian Amstrong, Steve Aoki, Snoop Dogg, etc., they are all commonly used images and visual symbols of Meme coins and NFT projects, especially the Meme content that combines the images of Trump and Pepe, which has been used as his campaign material.
It is no wonder that there were previous reports that Biden's campaign team planned to hire a meme manager to try to win the support of young voters. After all, Meme is a "cultural common denominator" that can resonate with people, and Meme coins and NFTs can both serve as carriers of Meme.
Trump & Pepe Meme Content
Threshold similar: Meme and "Small Picture"
In terms of entry barriers, Meme coins and NFTs also have certain similarities, for example,
1) The cost of understanding both is relatively low, one is a Meme-related token, and the other is a “small picture”;
2) The purchase thresholds of the two are relatively low. One is a token with several zeros after the decimal point, and the other is a non-fungible token that only pays gas and can be free minted.
3) The sales operations of the two are relatively simple. One is to sell directly through on-chain transactions or exchanges through DEX, and the other is to place orders through different NFT markets.
Of course, the low entry barriers of the two are only relative to other cryptocurrency fields such as DeFi, GameFi, SocialFi, etc. After all, a wallet may block countless Web2 people, and they can only sigh at the "airdrops" in the cryptocurrency industry.
Difference Breakdown: Is Memecoin More Addictive Than NFT?
Compared with the similarities, the differences between Meme coins and NFTs are worth talking about. For many people, the reason why they lose more and more in the NFT field, and this phenomenon has not changed much after playing Meme coins, is because they have a clear understanding of the differences between the two, and it is easy to fall into the more dangerous "PVP trap", and then lose again and again, and have no choice but to leave. Specifically, the differences between Meme coins and NFTs include:
Liquidity Differences
There is a saying in the industry that "projects that only talk about floor price/unit price without talking about liquidity are all rogues." This is true. Cryptocurrency is an industry that is logically supported by countless liquidity. Therefore, it is difficult to find high-quality investment targets in the volatile market by only looking at the price of a single Meme coin or the floor price of NFT.
Moreover, compared with the 5K or 10K quantity limit commonly used in the NFT industry, the total amount of Meme coin projects is tens of billions, even hundreds of billions, and hundreds of billions. Considering that the main force in the industry is still token players, and DEX is easier to buy and sell than NFT market, the liquidity difference between the two is huge, mainly reflected in:
1) Initial liquidity. Generally speaking, the initial liquidity of NFT is much smaller than that of Meme coins. For some NFT projects, dozens of ETH are enough to raise the floor price, while the initial liquidity requirements of Meme coins are higher;
2) Liquidity rate. Generally speaking, the liquidity rate of Meme coins is much greater than that of NFT. If they become the focus in a short period of time, their liquidity and market value can grow rapidly. However, NFT is limited by the functional operation of the NFT trading market, and it is difficult to achieve such a rapid price increase.
3) Liquidity cliff. Generally speaking, the liquidity cliff of Meme coins is steeper. In extreme cases, the number of people dumping and the amount of tokens dumped can be rapidly reduced in just a few minutes or even tens of seconds, which is more terrifying than the "buying disappearance technique" of NFT.
Therefore, when NFT players turn to the Meme coin field, the first thing they should pay attention to is to increase the priority of project liquidity.
Differences in news
Meme coins and NFT projects also have very different reactions to news, and these differences are mainly caused by the different media between the two (Token VS NFT).
For NFT projects, good news can be divided into several categories, such as:
1) The project founding team is a well-known team in the industry;
2) The project receives huge capital investment;
3) The project has caused a huge sensation or eye-catching effect in the Web2 field, etc.
Behind this information lies the NFT players’ expectations for “takers”. In other words, NFT players will only choose FOMO and try to sell the “small pictures” to “value investors” when they see more powerful players entering the market and being able to take over. Therefore, even if many NFT projects turn to issuing coins, it is difficult to stop the downward trend of the floor price without the intervention of strong capital.
Meme coin is completely different. For Meme coin projects with stronger community and Meme attributes, the entry of capital or institutions often causes holders to rush to sell. Perhaps it is because Meme coin carries more people's expectations for the spirit of decentralization, or perhaps many people think that the entry of institutions is the peak of the price.
In addition, unlike the NFT project that "only sees the good and not the bad", many times, "bad news" in the popular sense is actually good news for a Meme coin project. For example, the Solana ecosystem Meme coin project SLERF, after the founder destroyed the liquidity pool due to an operational error, it attracted great attention from the crypto community, making "Oh, Fuck" a famous Meme for a period of time, leading the coin price to break through $1 and quickly listed on N mainstream exchanges.
In other words, the Meme Coin project cares more about "whether more people pay attention to it" rather than "whether this thing is good or bad."
Difference in spread
Based on the above differences, and the fact that Meme coins are more viral cultural carriers than NFTs, the difference in the degree of spread between the two is particularly huge.
A good Meme coin can be spread to hundreds of thousands or even millions of people in just a few days or even hours. However, no matter how hard an NFT project tries, its target audience can only be confined to a relatively small circle. Thousands or even tens of thousands of people are already the level of influence that can be achieved by leading projects.
After all, NFT images are limited, but the spread of Memes is unlimited.
Black box differences
In addition, due to the difference in population range and distribution form, the black box attribute of Meme coin is stronger than that of NFT. After all, the insider trading of NFT can often only be distributed through the whitelist, and the number of addresses is relatively small, while the number of participating addresses of Meme coin is more, so the insider trading addresses are more hidden and the delivery methods are more diverse.
It is obvious that the flexibility of Token is far greater than that of NFT.
Investment strategy selection
Therefore, based on the above differences, the game difficulty for Meme coin players is actually higher than that for NFT players, so there are mainly three investment strategies:
The first type is the luck type, which is purely based on luck. If you buy the Golden Dog and are lucky enough not to sell it, you deserve to make money;
The second type is the casting type, which requires patience, especially in the meme coin craze. A small amount of money is invested in a single project, and the victory of the horse racing mechanism is finally achieved. That is, one or several successful projects cover all costs and make a profit. This is also a good way out.
The third type is the tracking type, which is suitable for Alpha players who "live on the chain" and "are sensitive to news". They can complete sniping in the early stage of Meme coin launch (generally within 1-3 hours), and then sell it in batches based on project development and news conditions. That is, they obtain more chips in the early stage, and then take profits in batches and laugh to the end. This is the most difficult and profitable type, and of course, the risk is also the greatest.
Darkfarms 1 account homepage background image
Analysis of the main roles: Times have changed, but people are still the same
After talking about what has changed, let’s talk about what has not changed, that is, the main players on the field. We can divide them into 3 categories. Times have changed, but people are still the same:
Project Party
In the past, there were mainly two types of NFT project parties: one was from the Crypto Native team, whether it was the DeFi team or industry professionals, who had relatively more experience in the cryptocurrency industry and a higher project success rate; the other was the team that, under the influence of the wealth effect, entered the Web3 field from traditional industries and realized the "Web2 upgrade", including star projects, traditional company projects, IP projects, and so on.
In comparison, the current Meme Coin project parties also include the above two types of people, but the ratio of the former is slightly higher. The reason is that Crypto Native people have stronger survival ability, can survive the bear market, persist in the bull market, and are active in today's "Monkey Market"; while traditional teams have either been eliminated and left, or have quickly integrated, gradually figured out the industry rules and are familiar with the industry's unspoken rules, and started their own "opening harvest road."
It is worth mentioning that one of the main forces behind this year’s Meme coin craze project is former crypto artists. BOME has become a popular project leading the Meme coin craze and achieving the “3-day Binance” achievement thanks to the efforts of Darkfarms1, who is a loyal fan and creator of Pepe Meme, as well as an NFT artist.
Participants
Unlike the relatively simple composition of previous NFT tracks, or in other words, participants who entered NFT for purposes such as "for art", "for aesthetics", "for collectibles", etc., the composition of participants in the current Meme coin industry is more complex. There are both wealthy whales, tycoons, and wild dealers, as well as small investors who enter the circle to pursue their dreams, and aspiring young people who "want to improve their lives". Everyone's purpose is surprisingly consistent and pure: to make money.
Whether it is a zero-sum game on the market or an inflow of funds off the market, the Meme Coin project that makes me money is a good project.
The theme that remains unchanged: asset issuance and wealth game
Time flies, bull and bear markets continue, many things change, but only two things remain unchanged:
Asset issuance: From NFT component platform to “one-click coin issuance”
In the past, as a major way of issuing assets, NFT had many problems, such as art preparation, contract deployment (different standards such as ERC 721, ERC 1155), project operation preparation, pricing strategy, KOL marketing, whitelist mechanism, gas fees during Mint, etc., which also gave rise to different types of platforms such as NFT component platforms, NFT Mint platforms (such as mint.fun, Zora, Manifold, etc.) and sweeping platforms (such as genie). It is no wonder that some people joked at that time that "many NFT project parties can obviously rob money directly and give me a small picture."
Now, Meme coins have become the hottest track nowadays. Whether it is celebrities, artists, stars or L2 networks, popular ecosystems, they can all issue assets and attract market attention through Meme coins. "One-click coin issuance" platforms such as Pump.fun have pushed the Meme coin craze to the extreme. The rapid increase in the number of Meme coins in the Solana ecosystem also benefits from this.
This also reflects a major long-term trend in the cryptocurrency industry: any model that can achieve rapid asset issuance will become part of the industry.
This is true from the past DeFi Summer, to the GameFi craze, to the NFT Summer.
Wealth Game: From Believing in Capital to Not Taking Over Each Other
Compared with the past, the situation of wealth game has also undergone tremendous changes. In the past, the development of the cryptocurrency industry was often inseparable from the support of capital such as venture capital institutions and cryptocurrency funds. On the one hand, it was due to the need for financial support, and the entry of capital could bring more stable cash flow support; on the other hand, it was due to the influence of capital other than funds, such as marketing, legal compliance, endorsement and so on.
But things changed after the Bitcoin spot ETF was passed in the United States at the beginning of this year.
In the past, situations where retail investors took over for institutions were rejected by the market. Whether it was the L1 public chain, infrastructure construction, L2 network, or AI, DePIN, or RWA track, compared to the Meme coin track, which "at least looks more" decentralized, the appeal was much less than before.
On the one hand, if for the purpose of allocating investment positions, retail investors can enter the cryptocurrency market through U.S. stocks and purchase spot Bitcoin; on the other hand, if for the purpose of making wealth through high-multiple, high-risk gambling, retail investors are more inclined to invest in Meme coins, which have lower thresholds, are easier to understand, and do not have the so-called "value empowerment and roadmap pie in the sky".
I have to say that this generation of retail investors doesn’t seem to be as easy to fool as before.
Or maybe the market environment has indeed changed.
Conclusion: Memecoin may become the "first lesson for new cryptocurrencies"
At the end of the article, I would like to end with a question.
Many people judge the stage of market sentiment by the degree of FOMO of people outside the market. Some people use whether outsiders (especially the uncles and aunts in the vegetable market) ask about the timing of buying Bitcoin as a criterion, while others use whether outsiders buy Meme coins as an indicator of escaping the top. The key is sometimes indeed very accurate.
But think about it from another perspective. For an ordinary person with limited assets who enters the cryptocurrency market for the first time, looking at the dazzling array of tokens, colorful candlestick charts, and different buy and sell operation keys on exchanges or DEXs, with hundreds or thousands of dollars in his hands, will he choose to "play it safe and invest in Bitcoin and Ethereum", or will he choose "Meme coins that are highly contagious, have strong emotional resonance, have a single token price that is negligible, and may have 10 times, 100 times, or even 1,000 times higher returns"?
To be honest, I don’t have a standard answer, and the answer is in everyone’s heart.
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