In 2024, the Memecoin market is experiencing periodic surges, driven by new platforms that promote ecological development and gradually attract more professional and transparent investment models.

Author: HTX Research

Translation: Blockchain in Plain Language

Abstract

This article analyzes the Memecoin sector, exploring the current status and development characteristics of Memecoins in 2024, covering trends, platform emergence, dissemination methods, and market strategies. Key points include:

1) Memecoin Boom and Dissemination Models: The Memecoin market is experiencing periodic surges in 2024, especially in the early year and the second quarter. The dissemination of Memecoins heavily relies on social media and community sharing, often exhibiting exponential growth. New dissemination trends have emerged this year.

2) Rise of Memecoin Platforms: Memecoin launch platforms have become transformative factors in this cycle. Platforms like Pump.fun and SunPump have simplified the creation and trading processes of Memecoins, attracting a large user base. Each platform has its unique characteristics in terms of user composition, revenue models, and ecological support.

3) Market Liquidity and Investment Strategies: Major public chains and projects view Memecoins as "outposts" in ecological development, marking a significant change in this cycle. Memecoins are seen as pioneers driving the development of various blockchain ecosystems, attracting market attention and funds, further promoting ecological growth. Investment strategies in the Memecoin sector mainly focus on popular coins, trading volume, and market sentiment.

4) Future Prospects of Memecoins: With increased liquidity, direct participation from major ecosystems, and backing from venture capital, the Memecoin market is expected to continue strong growth in the second half of 2024. More professional and transparent investment and trading methods for Memecoins are anticipated in the future.

1. New Characteristics of the Memecoin Sector in This Cycle

1) Sustained Periodic Boom

Unlike previous fleeting Memecoin booms, this round of Memecoins is exceptionally hot, particularly from February to April this year.

Whether it's the average weekly increase of 6 times for 20 popular coins like PEPE, or the rapid listing records of coins like WIF and BOME on CEX, the message is clear for cryptocurrency investors: the Memecoin craze has returned.

The dissemination of internet memes is similar to the spread of infectious diseases in many ways. Like a virus, memes rely on their "hosts"—the users who share and spread them—to proliferate rapidly. Once a meme enters popular social networks, it can spread quickly by "infecting" a large number of users, especially when it evokes strong emotional resonance or has easily imitable characteristics. This trait was evident in the ORD meme craze at the beginning of 2024 and the SOL meme boom in the second quarter.

The characteristics of meme dissemination typically exhibit exponential growth. Initially, only a few people are exposed to the meme, but it can quickly reach a wide audience. Additionally, the spread of memes is influenced by network nodes, which act like "super spreaders" of diseases. Users with a large following can significantly accelerate the spread of memes, thereby expanding their influence. This model is similar to the spread of infectious diseases, relying on close interpersonal connections and interactions, as illustrated below:

The dissemination of internet memes resembles the spread of infectious diseases, as shown in the SIR model. Red represents susceptible individuals, green represents infected individuals, and blue represents recovered individuals.

2) The Rise of Memecoin Platforms is a Notable Feature of This Cycle

A prominent feature of the current Memecoin sector's rise is the emergence of Memecoin launch platforms, such as the new Pump.fun and SunPump. In this cycle, Memecoin platforms have simplified the creation and trading processes of Memecoins and seamlessly integrated with mainstream blockchains, attracting a large user base. These platforms have unique characteristics in terms of user targeting, daily issuance volume, profitability, project success rates, ecological integration, marketing, and community engagement.

As the crypto industry continues to evolve, the Memecoin space is filled with opportunities and challenges, making innovation particularly important. The key to the success of Memecoin platforms lies in providing unique selling points that combine cultural trends with technological innovation.

Comparative Analysis of Launch Platforms

Source: Tiger-Research

Target Audience

In terms of user demographics, the two typical Memecoin platforms differ. The earlier launched Pump.fun primarily targets Western users, while SunPump, launched by Sun Yuchen, is more popular in Asia. Additionally, Sun Yuchen and his team's strong marketing on platforms like X has made SunPump particularly prominent in the TRON ecosystem.

Revenue and Fees

Although SunPump launched later, it generated approximately $567,000 in revenue by the end of August, with an average daily issuance of about 7,500 Memecoins. Pump.fun's average daily issuance is around 7,000, showing a small difference.

Both SunPump and Pump.fun charge a 1% transaction fee.

Ecological Support

Pump.fun was developed by a third party and initially launched on the Solana blockchain. Around May and June of this year, it integrated with the Base chain and Blast chain. In contrast, SunPump primarily operates on the TRON blockchain, benefiting from its payment system (which has a large user base among USDT-paying users) and trading platform infrastructure support.

Other Memecoin Platforms

Source: Rootdata, ChainCatcher

In addition to the aforementioned Pump.fun and SunPump, there are other launch platforms targeting different fields. For example, Memehub.ai is an AI-driven launch platform, Wonton.fun is dedicated to the TON chain, and Satspumpfun focuses on the Bitcoin ecosystem.

These platforms support different public chains and functionalities, as shown in the table above.

Memecoin Ecology and Liquidity In this cycle, Memecoins have performed exceptionally well, attracting significant market attention. A notable feature is that various market participants closely integrate liquidity with the Memecoin ecology, using Memecoins as pioneers to lead market enthusiasm, liquidity, and ecological development. This is primarily reflected in the following two aspects:

Memecoins are viewed as "outposts" for ecological development by major public chains and projects. From the "foolish dragon" shape played by the founder of Solana to the "fascia gun sector" of Pump.fun and NOT, Memecoins continue to lead market trends. Memecoins are akin to "traffic products" in the Web2 ecosystem, capable of entering the market first, attracting funds through Memecoins, and subsequently channeling these funds into the infrastructure of the ecosystem, such as DeFi and lending products. Attracting funds through Memecoins and subsequently launching practical products is one of the strategic paths taken by ecosystems and project teams in this cycle.

• The time lag in dissemination provides a buffer for liquidity. There is a time difference in the perception of traditional market outsiders and the Web3 community. When some people enter the crypto space, the first phenomenon they often encounter that promises "high returns and overnight wealth" is the Memecoin sector. High volatility means they can yield substantial returns in a short period. Individual investors entering the market may be attracted by the opportunity for overnight wealth. Additionally, many Memecoins are priced lower than Bitcoin, allowing individual investors to purchase a large number of tokens with a smaller investment. These low-threshold investments are more appealing to investors with limited funds.

  Case Study: Memecoins as Ecological Liquidity As mentioned, different chains, projects, and ecosystems are leveraging Memecoins as pioneers of liquidity, with many cases to follow. For example:

  Linea Chain: Foxy Supported by the official foundation of the Linea chain, Foxy is a Memecoin launched by the parent company of MetaMask. Although there was little information disclosed initially, the Linea chain and its stakeholders are the driving forces behind it. Foxy yielded about 40 times returns on its first trading day, thanks to the combined efforts of KOL investments and promotional activities.

• Base Chain: Degen, Enjoy, and High Numerous Memecoins have been launched on the Base chain, with $Degen being the most representative, performing excellently from February to March 2024. $Degen started as a community-driven pure meme project. After its "top hat gentleman" icon became widely recognized, it gained utility through official applications, becoming a tipping currency on the Farcaster social platform, although its meme attributes still dominate, with about 80% being meme-related and 20% being utilitarian. Furthermore, various parties in the Farcaster and Base ecosystems subsequently supported Degen. High, on the other hand, is a Memecoin on the Zora chain.

  Other Examples:

  Manta Chain: In June 2024, Manta announced a $10 million "moon landing meme grant."

• Avalanche Chain: COQ, KIMBO, TECH, GEC. These primarily launched liquidity-driven Memecoin strategies in the first half of 2024, receiving official support from the Avalanche Foundation.

• Fantom: The Sonic meme season launched in June.

• zkSync: Its meme mascot is Zeekcoin MEOW.

  2. Main Types of Memecoin Projects in 2024

  1) Coins Controlled by Institutional Investors

  For example, BOME/SLERF/MEW/MANEKI. Coins from large funding pools are classified as those controlled by institutional investors, featuring massive funding pools and rapid price surges. These coins can accommodate large investments and provide high multiple returns, but their rapid ascent to high market capitalization poses challenges for later investors trying to enter the market.

  2) Coins Associated with Hot Topics

  For example, GME/BODEN/TREMP/DJT/NCAT. Such meme coins often correspond to the actions and words of high-profile individuals, such as Elon Musk, Donald Trump, or Roaring Kitty. However, due to various news events, the prices of these Memecoins can be highly volatile. For instance, the Trump-themed DJT attracted many speculators due to rumors that Barron Trump (Trump's youngest son) was involved, but the price plummeted after well-known crypto accounts like Zach XBT and GCR revealed the truth on X. Similarly, GME's price surged after Roaring Kitty returned to post, but its content was hollow, leading to a subsequent price crash.

  3) Community Coins

  For example, POPCAT/MICHI/SC/NEIRO. Community coins themed around cats and dogs can yield high returns but also carry a high risk of failure. They may offer high returns because these coins often have long periods of low price accumulation, allowing for low-cost hoarding. However, due to a lack of scarcity, these coins are also prone to failure. Having an eye-catching logo is crucial for these coins, but the community atmosphere is even more important.

  Additionally, community Memecoins often gradually build consensus among retail investors when market conditions are favorable, driving prices up. However, when market conditions deteriorate, these coins often crash quickly due to factors like market cap dispersion.

  4) Celebrity Coins

  For example, MOTHER/RNT/PAJAMES. Celebrity coins have gained popularity on the Solana chain in recent weeks, but most celebrities do not wish to participate in their coins long-term, so many coins are merely short-lived opportunities. However, if a celebrity with a large following is willing to operate a community, these coins may have good potential. To date, the most successful celebrity coin is $MOTHER, launched by rapper Iggy Azalea, who has tens of millions of fans promoting the token. She also actively interacts with crypto accounts on X and engages with community members, which is a reason for the coin's sustained popularity.

  5) Other Coins

  For example, WEN/BONK/WIF. In addition to the aforementioned types, there are many other popular Memecoins. For instance, WEN, launched by the Jupiter team, and BONK, rumored to be launched by the Solana Foundation to revitalize Solana, have both reached high market capitalizations due to support from legitimate teams. Additionally, WIF is the largest Memecoin by market cap on Solana and is considered a barometer for Solana Memecoins, making it difficult to categorize. Although it started as a community coin, it later attracted significant funding, becoming one of the strongest Memecoins in this bull market cycle.

  3. Outlook for the Memecoin Sector in the Second Half of 2024

  1) Altcoin Season at a Low Point

  Aside from the aforementioned favorable factors, the explosion of Memecoins in the second half of 2024 can be viewed from the perspective of the macroeconomic cycle. Currently, the altcoin season index is only 35, and this trend is one of the important reasons why the Memecoin sector is expected to return in the second half of the year.

  2) Establishment of Ecological Participation and Consensus in the Memecoin Sector

  With the launch of platform Memecoins, ecological Memecoins, and various meme coin launch platforms, the Memecoin sector has not only attracted the attention of individual investors but also gained recognition and participation from various ecosystems. From May to August this year, multiple ecosystems have launched their own ecological Memecoins as launch platforms. Compared to the previous cycle, the internal consensus within the Memecoin sector has also become more solid.

  As pioneers, Memecoins are expected to have four key impacts on ecological construction and project development:

  First, major Memecoin foundations, support programs, or community initiatives will continue to emerge, promoting the development of Memecoins within their respective ecosystems through innovative funds and other means.

  Second, venture capital will get involved. Starting in the second half of 2024, many VCs have announced plans to invest in Memecoin infrastructure, shifting from previously opposing Memecoins to gradually accepting them.

  Third, strategies regarding Memecoins will become more professional and transparent.

  Fourth, as liquidity forms, more support mechanisms will emerge, indicating that secondary products based on Memecoins will see new development. For example, Memecoin management tools, meme content creation and secondary dissemination platforms, and secondary creation tools based on Memecoins will all experience further growth.

  3) Increased Liquidity and a More Favorable Environment for Memecoins

  With interest rates expected to trend downward from the second half of 2024 to the first half of 2025, the overall macro environment will gradually become more accommodative. Due to their small market capitalization, high recognition, and low participation thresholds, Memecoins are likely to gain more growth momentum in this environment.

  Article link: https://www.hellobtc.com/kp/du/10/5504.html

  Source: https://htxresearch.medium.com/2024-meme-sector-analysis-from-viral-spread-to-ecosystem-beachhead-fb12dc277b67

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