Starting from the last cycle…
Beginning with the last cycle's PEOPLE and Shib, memes have become a cultural expression of the community. From a community perspective, meme coins are symbols that best reflect the sentiments of retail investors and the atmosphere of the community. Let's revisit the rise of PEOPLE; the initial establishment of the community was to win a rare copy of the U.S. Constitution at an auction. Constitution DAO attracted 17,437 contributors and raised over $47 million. PEOPLE is the token given to contributors by Constitutional DAO, which became a community-owned token after the auction failed. This process connected groups that shared the same belief in community autonomy and the federal constitution, ultimately returning organizational rights to the community itself. This origin story imbued PEOPLE with a strong political color, and in subsequent political events, the People coin exhibited significant market performance. For instance, during the U.S. midterm elections in June this year, PEOPLE created a nearly 600% increase in a short period. Similarly, the addresses and concentration of holders of PEOPLE also reflected that this was a "decentralized social experiment."
Since its launch in August 2020, Shiba Inu (SHIB) has rapidly become one of the most followed meme coins globally, thanks to clever branding and strong community power. SHIB's founder, Ryoshi, locked 50% of the tokens on Uniswap at launch, while the other half was transferred to Ethereum founder Vitalik Buterin's address, who destroyed 90% of SHIB in May 2021 and donated the remaining portion to an Indian pandemic relief fund. This event attracted global media attention, causing SHIB's market cap to soar, reaching over $40 billion in October 2021, placing it among the top ten cryptocurrencies worldwide. The market cap performance of SHIB is particularly noteworthy: it rapidly appreciated from a few million dollars, even surpassing many established mainstream coins in a short time, becoming a target for 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 like Twitter and Reddit, continuously expanding its influence. To further enhance the token's value, the SHIB team launched the decentralized exchange platform ShibaSwap and issued tokens like LEASH and BONE, forming a rich ecosystem. Additionally, SHIB is developing the Layer 2 solution Shibarium to further improve transaction efficiency and enhance its practical application scenarios. This decentralized distribution mechanism, community-driven initiatives, and ecosystem expansion have built a unique meme coin ecosystem, transforming SHIB from a mere meme coin into a community-driven project with practical application value, showcasing the potential of meme coins beyond market sentiment and speculation.
Regardless, whether as cultural symbols or political symbols, DAOs and meme coins have demonstrated surprising effects in the market. Consequently, more and more people believe that DAOs and digital currencies are inherently suited for memes.
Meme Style of This Cycle
BRC20 and Inscriptions
The meme coin craze in this market cycle presents some characteristics that are distinctly different from previous ones. With the rising expectations for a Bitcoin ETF, Bitcoin-related tokens like BCH have become new destinations for market funds. Additionally, some Ethereum-mimicking designs have emerged in the Bitcoin ecosystem, such as Bitcoin's Layer 2, EVM, and the BRC20 standard. The birth of BRC20 has endowed the Bitcoin network with the ability to issue tokens, quickly attracting significant capital attention.
In this context, star tokens within BRC20, such as Ordi, have surged first, further propelling the hot market for BRC20. Meanwhile, animal coins like Rats have also gradually risen, pushing the meme coin trend to new heights. Other public chains like Ethereum, Avalanche, and Solana have followed suit, launching similar inscription designs, allowing inscription projects to flourish across various chains, bringing renewed diversity and innovation to the meme coin market.
Celebrity Effect and Special Events
Moreover, meme coins have been greatly influenced by celebrities and certain special events. During the U.S. election period, meme tokens themed around Trump sparked a frenzy in the crypto market. For example, meme coins like "MAGA," "Super Trump Coin," and "FreeDum Fighters" leveraged political events to attract investor attention. Notably, FreeDum Fighters introduced the concept of "PolitiFi," launching a fictional duel mechanism featuring characters supporting Trump and his opponent Harris ("MAGATRON" and "Kamacop 9000").
Similarly, after Musk changed his social media bio to "Chief Troll Officer," meme coins like TROLL instantly ignited the market. The price of TROLL surged by 330% within just 24 hours, attracting a large number of speculators. This move directly triggered a frenzy for TROLL and other meme coins, with many traders achieving substantial returns in a short time by purchasing TROLL.
Accompanying the AI boom is AI memes. For instance, the GOAT (goatseus maximus) token's concept was created by the AI bot "Truth Terminal" and developed by a creator using the Claude-3 Opus training model. The success of GOAT has led to the emergence of various AI meme coins, such as SHEGEN, but none have yet surpassed GOAT in scale and influence.
Public Chains and Meme Ecosystem
Although meme coins initially focused on entertainment or topics, they have played a 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 an increase in wallet creation and transaction volume. For example, Ethereum has become the preferred platform for launching meme tokens due to its ERC-20 standard, while Solana has attracted many meme coin users with its low-cost transactions. The characteristics of various public chains attract different types of traders, and memes have enhanced the user base and ecological exposure of public chains. At this point, meme launchpads have also emerged. Pump.fun is designed for users to create and trade meme tokens, with its gamified mechanism and social interaction enhancing the activity of the Solana ecosystem.
In simple terms, the mechanism of Pump.fun allows users to publish new meme coins with one click and reasonably mint tokens through a bonding curve pricing system. Newly created memecoins are directly sent to Raydium for trading, and when the market cap reaches a limit, the platform injects liquidity into Raydium and burns some tokens to enhance the liquidity and stability of the coin. For creators, only about 0.02 SOL in initial fees and 2 SOL in migration fees are required. These features not only make Pump.fun an easy-to-launch memecoin platform for project teams and convenient for participants to trade but also make the Solana ecosystem more sticky and interactive.
In response to the meme token craze, many public chains have also "taken the initiative," such as accelerating transaction speeds and launching new token standards. Blockchains like Solana even refer to meme tokens as "cultural tokens," emphasizing their important role in spreading blockchain awareness and promoting community development. All of this indicates that meme tokens can not only enhance network effects but also attract new users through cultural dissemination. Subsequently, meme tokens may continue to serve as carriers of cultural dissemination and entry points for traffic.
Why Have Meme Coins Succeeded?
Let's first examine why meme coins have risen in this cycle from a trading perspective. The most important reason is that there are insufficient undervalued assets in the market to absorb funds. Our ideal bull market is one where ETH and BTC drive other altcoins to "take off," yet in this cycle, most altcoins have not outperformed BTC's returns. Additionally, the wealth effect of new projects has not met expectations: the sheer number of new projects has greatly dispersed market funds, and leading new projects have already inflated in valuation during the primary fundraising stage, leading to significant volatility after their IEO/IDO launches. As a result, small investors in exchanges have seen relatively average returns, and this sentiment of decentralized capital games has made retail investors more willing to choose memes. Furthermore, new narratives in this cycle, such as intent, zk, or FHE, have not gained recognition from most market traders; participants are largely skeptical, and these narratives, which currently do not show secondary wealth, still seem distant, creating a strong need for new narratives to emerge for speculation.
From the perspective of the memes themselves, when reviewing successful meme coins, we can identify several essential conditions for a good meme coin: the meme must possess unique symbols and symbolic meanings, with the potential for viral spread and secondary creation. Shiba Inu is a prime example. Alternatively, the community as a whole should have an inspiring story and vision that resonates emotionally, encouraging more users to identify with and participate in it.
Secondly, operation is crucial for the success of a meme. Achieving community autonomy at the outset and forming a unified and consistent atmosphere through extensive communication is vital. The founding team must be adept at using social media and various means to maintain user engagement, ensuring community members have opportunities to participate in decision-making, thereby enhancing cohesion and a sense of belonging.
The most critical point is that there must be a sufficiently strong and stable group of backers willing to support the project long-term, providing price support. The long-term trust and belief of these holders are essential guarantees for the stable growth of meme coins.
Are Meme Coins Speculation or Self-Expression?
Manipulation and Risks
As of recently, the total market cap of the meme coin sector is approximately $58 billion, accounting for about 2.5% of the total cryptocurrency market value. Although it holds a certain position in the market, its overall scale remains relatively small. By the end of 2024, the top ten meme coins will occupy most of the market cap of meme coins. Among them, Dogecoin (market cap about $11 billion) and Shiba Inu (market cap about $6.5 billion) are leading. Along with other popular meme coins like Floki Inu, Dogelon Mars, and Baby Doge Coin, these top meme coins account for over 80% of the total market cap of the meme coin sector, with a recent total valuation reaching about $39.7 billion, indicating a highly concentrated phenomenon in the meme sector, where a few tokens dominate most of the market share. Additionally, since some meme coins are primarily held and manipulated by strong backers, this leads to significant overall volatility. In the face of such a high concentration and volatile market environment, trading for profit has become an almost speculative endeavor akin to playing with fire.
The Challenge of Balancing Innovation and Value
The author believes that the most attractive core value of memes is their anti-establishment expression: countering mainstream narratives and decentralized capital… They are symbols that grow out of community interactions, and the expressions they carry represent the personal expressions of each participant in the community. However, memes and meme coins are completely different entities. Racking one's brain to think of new narratives and gimmicks, and then using celebrity effects or market-making to drive up coin prices, seems to contradict the essence of memes. Some believe that meme coins are the most trivial innovation in the crypto world, occupying a lot of block space and affecting the blockchain system itself; others feel that the speculation around memes is simply a natural product, and guiding the community's speculative enthusiasm reasonably is part of the meaning of crypto. Regardless of people's views on meme coins, they are uniquely shaping the future of blockchain and, to some extent, reflecting the complexity and diversity of the digital asset market. In this context, how to balance innovation and value remains a question that the entire crypto community needs to ponder deeply.
About MemeBox
MemeBox is a new brand under Gate.io dedicated to the prosperity of the MEME ecosystem, which will deeply explore the potential and opportunities of the Meme market. MemeBox is committed to perfectly integrating technology and culture, gathering global meme culture enthusiasts with an open and inclusive attitude, and jointly promoting a new trend in meme culture!
Twitter: https://x.com/GateMemeBox
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