Editor | Colin Wu
Note: This article is for sharing thoughts only and not as any investment advice.
The new Meme god Muard mentioned at the Singapore Token2049 that Crypto has entered the Memecoin Supercycle, and this live video has attracted a lot of attention and reposts across the network. In the crypto market, Memecoin has become an investment direction that cannot be ignored. However, whether the value of Meme itself is truly recognized by the public, different investors must still hold different views, especially in the investment logic of traditional investors, who are more likely to think that this is no different from 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 the Value of Memecoin 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, and attention has become an extremely scarce resource. Similar to when we scroll through Douyin or Twitter, people's attention is constantly scattered in the vast flow of information. Meme/meme, through its unique cultural symbols, humorous expressions, and even fanatical religious nature, successfully attracts and aggregates the attention of the masses, and Memecoin is the monetization of this attention, linking the enthusiasm and capital flow of the masses and the market.
The so-called success of Memecoin is not based on technology or application, or as Muard said in his speech on the Memecoin supercycle, Memecoin, this Token is a product itself, not because there is a product and then issue a Token. This is also where Memecoin differs from other so-called value coins and governance Tokens. As a product itself, it relies on social media, especially Twitter and TikTok, for dissemination. As more and more people discuss the same Meme, this attention will have a snowball effect, with the public's attention constantly accumulating, attracting more users, short-term investors, and market speculators, even the so-called big players.
Secondly, the success of Memecoin is closely related to investors' FOMO (fear of missing out) psychology. In the process of Memecoin dissemination, it not only attracts a lot of attention, but also accumulates FOMO psychology. When a Memecoin suddenly becomes a hot topic, and the Token price skyrockets, it often creates a sense of concern that investors will fear missing out on a huge investment opportunity. The best example of this is BOME, which was listed on Binance in 3 days.
Memecoin Life Cycle
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 instantly. In the face of this uncertainty, different investors have different ways to play. The author will broadly divide the life cycle of Memecoin into three stages: PvP stage, consolidation stage, and listing on top exchanges stage.
In the PvP stage, usually not more than the first three days after the birth of Memecoin, or even shorter than a few hours. Investors usually have a small position lottery mentality, entering and exiting the market earlier and faster, looking for short-term opportunities, which is generally suitable for degen players. Degen players usually have very strong short-term operation capabilities, good at using various monitoring tools, with very high sensitivity, even day and night, the essence is to grasp the opportunities formed in the process of attention flow. The simplest example is to catch Musk's tweet, superkol's tweet, and then go scan the chain after getting the keywords. The investment risk in the PvP stage is extremely high, because once the focus of attention shifts or lacks sustainability, it is very likely to evolve into a "who runs faster" game.
In the second stage, the consolidation stage after the PvP stage. Based on observation and personal Memecoin investment thinking, the author believes that an excellent Meme, or a Memecoin that can be entered with a larger position, has never been just a game of speed, and there will be enough time for ambush, and the community will also have more time to settle. In the consolidation stage, the initial purpose of Memecoin speculation and its narrativity will become the focus of investors' attention. Some Memecoins with strong narrativity and anti-imitation are more likely to become the focus of the market again in the future. In addition, the support of second-tier exchanges is an important signal, as it provides an important venue for the introduction of market makers, without the need to start from scratch to build a new similar Memecoin.
The third stage is the listing on top exchanges such as Binance, Coinbase and Upbit. The third stage is not the end of the Memecoin life cycle, but will open a brand new stage, entering the mainstream/sub-mainstream. After being listed on top exchanges, the security of Memecoin can be said to be greatly improved, no longer having such a strong survival crisis, but more waiting for the liquidity of the bull market to nurture.
Memecoin vs VCcoin
Compared to VCcoin, the reason why Memecoin has become a more mainstream investment approach at this stage is simply the wealth effect. Other tracks and other value coins are not making money, while Memecoin is relatively making money.
Since this year, VCcoin has been criticized by everyone, which can be classified into three major points. First, the compression of the space between primary and secondary valuations; second, the airdrop problem; and third, the fatigue of narratives and the problem of reinventing the wheel.
First, the high FDV and low liquidity have made secondary market investors suffer. Now, most of the projects launched on top exchanges have a market cap of 10-20 billion after opening, with an FDV of tens of billions or even over a hundred billion. Then they face constant unlocking pressure, which leaves no space for secondary investors. A significant contrast is that the once-popular Stepn had a GMT market cap of only 1 billion after the Launchpool opening, and it took 20 times to reach a 20 billion market cap. Now, basically no project opens with a market cap of only 1 billion or less, and the heat it can bring is also far less than Stepn.
Airdrops have become a very contradictory issue. Projects need to attract shillers to boost valuations, but they are unwilling to distribute more tokens to these cat-scraping users, because airdrops are essentially distributing more tokens to their own people or people who are beneficial to them. Whether it's for the project party, the big players/institutions, or even the exchanges, the retail investors are in a weak position. As the golden age of cat-scraping has passed and the era of everyone reaping the rewards has also passed, more studios and sybils, the relationship between the project party and the retail/cat-scraping party is deteriorating, and the returns of the cat-scraping party are in jeopardy. Rather than working hard without reward, it's understandable that they are more willing to speculate in the Memecoin market.
The third pain point is the fatigue of narratives and lack of innovation. Each public chain is repeating the wheel in building things, and there are many infrastructures but few applications. Repeating the wheel is essentially a constant fragmentation of liquidity.
Although Memecoin also has many so-called conspiracy groups and hidden big players, at least their relationship with users is not so antagonistic. Whether it's retail, project parties or the so-called big players, the common goal is to expand the capacity. And most importantly, users have the opportunity to enjoy the valuation space that has been squeezed by VCcoin, those spaces in the primary market, with the opportunity to obtain them on the chain. Although the difficulty of obtaining is constantly increasing, there is still hope, rather than being completely squeezed and having no chance like VCcoin. Of course, if you are a degen player, you can also earn a wave and run away, without the need to think too much about these issues.
Old Memecoin vs New Memecoin
If we look at it solely from the perspective of attention, the development paths of old and new Memecoins are actually not much different. Even the largest market cap DOGE was often shilled by Musk a few years ago, and it would also see some upward movement. Now that the old Memecoins are listed on top exchanges, their large enough scale means they don't need so much of this instantaneous attention to stimulate, and their communities are also large enough to continuously attract external attention.
Of course, the new Memecoin has also given birth to many different ways of playing. First, the angle of hype has become more diverse, truly becoming a meme of all things, no longer limited to cats and dogs, but also zoos, as well as celebrity coins and political coins in the past, and the recent emoji coins, and even the holdings of superkol like Muard can become an angle for hype. Secondly, various pump tools have been born, the cost of issuing coins is very low, and the speed of the birth of new Memecoins is getting faster and faster, everyone can issue them, and there are many with the same name, competing in terms of time priority and capitalization, Memecoin and Memecoin are also competing with each other. In addition, the competition between different chains is also intensifying, with Solana and Ethereum being the most obvious, as well as Base and TRON in the past, and the recent Sui Mememecoin is also very hot.
But essentially they have not escaped the framework of attention, it is just that within this framework, more dissemination, differentiation and competition have been carried out.
Imagining the development direction of Memecoin
Vitalik has said that he sells ETH or the Memecoins recently frequently given to him by the community, in order to do charity. Then the role of Memecoin in supporting public welfare and charity, that may be an important direction of development in the future. Meme itself has a strong social transmission capability, so Memecoin may become a tool for funding social activities or public welfare projects in the future. Based on this direction, the community may not just be grassroots promotion or slogans, but may evolve into a kind of social public welfare group, to do offline charity or love movements and so on.
Of course, the most important thing for Meme or Memecoin is to maintain a certain purity, that is, simply to make people laugh, a kind of happiness. If it goes back to building chains and applications, it seems to deviate a bit from the original intention of Meme development. Of course, this is just my personal speculation and opinion.
