Starting from the previous cycle...
From the previous cycle's people and Shib, meme has become a cultural expression of the community. From a community perspective, meme coins are the most in line with the sentiment of retail investors and the community atmosphere. Let's review the rise of people, where the initial community was formed to win a rare copy of the US Constitution at an auction. Constitution DAO attracted 17,437 contributors and raised over $47 million. PEOPLE is the token given to the contributors of ConstitutionalDAO, and it became a community-owned token after the auction failed. The process of raising funds and bidding through digital currencies has brought together a group that shares the same beliefs in community autonomy and the federal constitution, and ultimately has returned the organizational rights to the community itself. This origin has given people a relatively strong political color, and the PEOPLE token has had a relatively obvious market performance in subsequent political events. For example, in June this year during the US mid-term elections, PEOPLE once created a short-term gain of nearly 600%. Similarly, the addresses and concentration of PEOPLE holders also reflect that this was a "decentralized social experiment".
Shiba Inu (SHIB) has become one of the most widely watched Altcoins in the world since its launch in August 2020, thanks to its clever branding and strong community power. The founder of SHIB, Ryoshi, locked 50% of the tokens on Uniswap at the time of issuance, and transferred the other half to the address of Ethereum founder Vitalik Buterin, who burned 90% of the SHIB in May 2021 and donated the remaining portion to the India Covid-19 relief fund. This event attracted global media attention and drove a rapid surge in SHIB's market capitalization, reaching over $40 billion in October 2021, ranking it among the top 10 cryptocurrencies globally. SHIB's market capitalization performance is particularly noteworthy: it quickly increased in value from just a few million dollars, even surpassing many established mainstream cryptocurrencies in a short period of time, becoming the object of pursuit for hundreds of millions of investors.
The SHIB community, ShibArmy, is the core force behind its continued development, with over 2 million participants currently active on social media platforms such as Twitter and Reddit, constantly expanding its influence. To further enhance the token value, the SHIB team has launched the decentralized trading platform ShibaSwap and issued tokens such as LEASH and BONE, forming a rich ecosystem. In addition, SHIB is developing a Layer 2 solution called Shibarium to further improve transaction efficiency and enhance its real-world application scenarios. This decentralized distribution mechanism, community-driven approach, and ecosystem expansion have built a unique Altcoin ecosystem, where SHIB is no longer just a meme coin, but a community-driven project with real application value, demonstrating the potential of Altcoins beyond market sentiment and speculation.
In any case, whether as cultural symbols or political symbols, DAOs and Altcoins have shown surprisingly effective results in the market. As a result, more and more people believe that DAOs and cryptocurrencies are naturally suited for memes.
The Meme Style of This Cycle
BRC 20 and Mint
The Altcoin craze in this market cycle has presented some features that are completely different from the previous one. Accompanied by the surge in expectations for the BTC ETF, Bitcoin-related tokens such as BCH have become a new destination for market capital. In addition, some designs that benchmark Ethereum have emerged in the Bitcoin ecosystem, such as Layer 2 of BTC, EVM, and the BRC 20 standard. The birth of BRC 20 has given the Bitcoin network the ability to issue tokens, and has quickly attracted a lot of capital attention.
Against this backdrop, the star tokens in BRC 20 such as Ordi have taken the lead in a strong rally, further boosting the hot market of BRC 20. At the same time, animal-themed Altcoins such as Rats have also gradually emerged, taking the meme coin trend to new heights. Other public chains such as Ethereum, Avalanche, and Solana have also followed suit, launching similar Mint designs, allowing Mint projects to bloom across various chains, bringing renewed vitality and innovation to the Altcoin market.
Celebrity Effect and Special Events
In addition, Altcoins have also been greatly influenced by celebrities and certain special events. During the US election, Altcoins themed around Trump sparked a crypto market frenzy. For example, Altcoins such as "MAGA", "Super Trump Coin" and "FreeDum Fighters" have used political events to attract investor attention. Particularly, FreeDum Fighters proposed the "PolitiFi" concept and launched fictional confrontation mechanisms supporting Trump and his opponent Harris ("MAGATRON" and "Kamacop 9000").
Similarly, after Musk changed his social media bio to "Chief Troll Officer", Altcoins like TROLL immediately ignited the market. The price of TROLL soared 330% in just 24 hours, attracting a large number of speculators. This move directly triggered a frenzy for TROLL and other Altcoins, and many traders were able to achieve huge returns in the short term by buying TROLL.
Accompanying the AI craze is the AI meme. Take GOAT (goatseus maximus) as an example, the concept of this token was created by the AI bot "Oracle Terminal" and developed by the team using the Claude-3 Opus trained model. The success of GOAT has led to the emergence of various AI meme coins, such as SHEGEN, but they have not yet surpassed GOAT in scale and influence.
Public Chains and the Meme Ecosystem
Although Altcoins were initially focused on entertainment or topics, they have played a relatively significant role in driving user growth in the crypto ecosystem and the development of public chain networks. These tokens, due to their high trading frequency, have attracted a large number of new users, leading to the creation of wallets and an increase in transaction volume. For example, Ethereum has become the preferred platform for launching Altcoins due to its ERC-20 standard, while Solana has attracted a large number of Altcoin users with its low-cost transactions. The characteristics of different public chains have attracted traders with different preferences, and Altcoins have enhanced the user base and ecosystem exposure of these public chains. At this time, Altcoin launchpads have also emerged. Pump.fun is designed specifically for users to participate in the creation and trading of Altcoins, and its gamification mechanism and social interaction have enhanced the activity of the Solana ecosystem.
In simple terms, the mechanism of Pump.fun is that users can easily launch new Altcoins and mint tokens through a bonding curve pricing system. The newly created Altcoin will be directly sent to the Raydium exchange, and when the market capitalization reaches the limit, the platform will inject liquidity into Raydium and burn some tokens to enhance the liquidity and stability of the token. For creators, they only need to pay an initial fee of about 0.02 SOL and a migration fee of 2 SOL. These gameplay not only make Pump.fun a memecoin platform that is easy for project parties to cold-start and participants to trade conveniently, but also make the Solana ecosystem more sticky and interactive.
In response to the Altcoin craze, many public chains have also "taken the initiative", such as accelerating transaction speed and launching new token standards. Blockchains like Solana even refer to Altcoins as "cultural tokens", emphasizing their important role in spreading blockchain awareness and promoting community development. This shows that Altcoins can not only enhance network effects, but also attract new users through cultural dissemination. Subsequently, Altcoins may continue to serve as a medium for cultural dissemination and a traffic entrance.
Why are Meme Coins Successful?
Let's first look at the trading perspective to see why meme coins have risen in this cycle. The most important reason is: there are not enough undervalued targets in the market to absorb the funds. Our ideal bull market is that ETH and BTC drive other Altcoins to "take off" together, but in this cycle, most Altcoins did not outperform the returns of BTC; secondly, the wealth effect of new projects did not meet expectations: the numerous new projects have greatly diversified market funds, and the top new projects have already inflated in valuation in the primary fundraising stage, and after the IEO/IDO listing, they began to fluctuate greatly, so the returns for small and medium-sized investors on the exchanges are relatively general, and this has led to a decentralized capital game mentality that makes retail investors more willing to choose meme. In addition, the new narratives of this cycle, such as intent, zk or FHE, have not been recognized by most traders in the market, and market participants are mostly skeptical, and these narratives that currently do not see secondary wealth are still so remote, the market is in dire need of new narratives that can be hyped.
From the factors of meme itself, we can find that a good meme coin basically has the following conditions: The meme itself must have unique symbols and symbolic meanings, with the possibility of viral dissemination and secondary creation. Shiba Inu is a good example. Or the community as a whole has an inspiring story and vision that evokes emotional resonance in the community and makes more users identify with and participate in it.
Secondly, operations are crucial to the success of meme. Achieve community autonomy at the outset, and form a unified and consistent atmosphere through a large amount of communication. The founding team must be adept at using social media and other promotional methods as well as various means of maintaining user stickiness, ensuring that community members have the opportunity to participate in decision-making, enhancing cohesion and a sense of belonging.
The most critical point is that there must be a sufficiently powerful and stable group of speculators who are willing to support the project in the long run, thereby providing support for the coin price. The long-term trust and belief of these holders is an important guarantee for the stable growth of Meme coins.
Are Meme Coins Hype or Self-Expression?
Manipulation and Risks
As of recently, the total market capitalization of the Meme coin sector is about $58 billion, accounting for about 2.5% of the entire cryptocurrency market. Although it occupies a certain position in the market, the overall scale is still relatively small. By the end of 2024, the top ten meme coins will account for the majority of the meme coin market capitalization. Among them, Dogecoin (market value about $11 billion) and Shib (Shiba Inu, market value about $6.5 billion) are in the leading position. Together with other popular meme coins such as Floki Inu, Dogelon Mars and Baby Doge Coin, the total market value of these top meme coins accounts for more than 80% of the entire meme coin market, with a recent total valuation of about $39.7 billion. The meme sector shows a highly concentrated phenomenon, with a few tokens occupying the majority of market share. At the same time, due to the fact that some Meme coins are mainly held and manipulated by large speculators, the overall volatility is relatively large. Facing such a high concentration and high volatility market environment, making profitable trades has become almost a speculative act of grabbing hot coals.
The Challenge of Balancing Innovation and Value
The author believes that the most attractive value core of Meme is the expression of anti-orthodoxy: against the mainstream narrative, against decentralized capital... It is a symbol that grows out of community interaction, and this symbol itself carries the personal expression of each participant in the community. However, meme and meme coins are two completely different things. Racking your brains to think of new narratives, new gimmicks, and then using celebrity effects or market making to drive up coin prices, seems to be at odds with the essence of meme. Some people think that meme coins are the most trivial innovation in the crypto world, occupying a lot of blockchain space and affecting the blockchain system itself; others feel that the hype of meme is a natural product, and guiding the community's hype enthusiasm is also the meaning of crypto. Regardless of how people view meme coins, they are shaping the future of blockchain in a unique way, and to some extent reflecting the complexity and diversity of the digital asset market. In this context, how to balance innovation and value is still a problem that the entire crypto community needs to ponder.
About MemeBox
MemeBox is a new brand under Gate.io dedicated to the prosperity of the MEME ecosystem, and will deeply explore the potential and opportunities of the Meme market. MemeBox is committed to the perfect integration of technology and culture, and will gather global Meme culture enthusiasts with an open and inclusive attitude to promote the new trend of Meme culture!
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