Preface:
Recently, Murad Mahmudov delivered a keynote speech titled "Memecoin Super Cycle" at Token2049, which received over a million views and interactions, sparking great discussion on MemeCoin.
MemeCoin's relatively fair public distribution logic and unique community cultural value make it an important narrative and hot spot in the current market. Its huge trading volume and huge price fluctuations attract the attention of traders.
Through the MemeCoin report, we hope to help readers understand the history and causes of MemeCoin, the factors that led to the outbreak of the MemeCoin track and the necessary conditions for success, as well as how to invest in MemeCoin. The content is for industry learning and communication purposes only and does not constitute any investment reference.
1. Tracing the origin of MemeCoin
What is MemeCoin?
MemeCoin is a cryptocurrency based on Internet pop culture, memes or funny content . This type of currency usually has no clear technical innovation or practical application scenarios , and mainly relies on social media and community promotion to gain popularity through viral spread .
MemeCoins generally share certain common characteristics:
- The project narrative is easy to understand and communicate and does not contain abstract concepts;
- There is no clear technological innovation, complex products or real revenue support;
- Contains a certain memes culture and can cause a certain degree of interaction or emotional resonance;
- Mainly rely on social media and user communities for promotion and marketing;
- Tokens are distributed fairly, and the tokens themselves have no clear utility or purpose.
Because MemeCoin is related to classic memes, funny pictures or celebrities, its price volatility is very large and is often affected by social media hype, community behavior and speculative sentiment. Early MemeCoins such as Dogecoin and Shiba Inu quickly gained attention by relying on these meme cultures.
MemeCoin VS Traditional Crypto Projects:
Although MemeCoin and traditional crypto projects (such as public chains, DeFi protocols, Dapps, etc.) all belong to the field of cryptocurrency, they have significant differences in core values, driving forces, and market understanding and response.
In summary, traditional encryption projects focus on technological innovation, application scenarios and product development. They have complex market narratives and valuation models, and support the value of tokens based on long-term market expectations and the revenue capabilities of actual products.
MemeCoin is completely dependent on social media discussions and community promotion. The token itself is a product of the attention economy and cultural symbolism. It has no complex technology or product support, and its price fluctuations are mainly driven by speculative demand and market sentiment. It is more like a speculative lottery or social game .
In essence, MemeCoin is an attention economy, a fusion of cultural and speculative attributes. It reflects a new form of integration of Internet culture and capital markets, and demonstrates the influence of the attention economy in the field of cryptocurrency.
The reason behind MemeCoin's popularity
MemeCoin’s popularity can be explained by three principles in economics: irrational exuberance, network effects , and the need for fair distribution . Together, these principles explain how MemeCoin was able to spread quickly and gain a lot of attention in the market despite the lack of technical support or intrinsic value.
Irrational Exuberance:
The concept of "irrational exuberance" was proposed by economist Robert Shiller, who points out that the driving force behind rising asset prices does not come from the intrinsic value of the assets or rational analysis, but more from investor sentiment, market hype and speculative behavior .
The price increase of MemeCoins is often closely related to the hype on social media platforms such as Twitter, Reddit, Telegram, etc., rather than any actual technological innovation or product application. Public comments and support for MemeCoins such as Dogecoin by celebrities such as Elon Musk can cause great market fluctuations in a short period of time, attracting more investors to rush in, thereby driving prices further up.
The price of MemeCoin rose sharply in a short period of time, and the wealth effect of early investors attracted more people to try to participate because of FOMO (fear of missing out). This huge short-term gain and the "get rich quick myth" further intensified the speculative sentiment in the market, causing more investors to ignore the actual value of MemeCoin, thus promoting irrational prosperity.
Network Effects:
The network effect is the phenomenon that the value of a product or service increases as the number of users increases . A key feature of the network effect is that when the number of users reaches a certain critical point, the influence and value of the product will explode.
The value of MemeCoin does not come from its technology or applications, but is gradually amplified through user participation, discussion, promotion and purchasing behavior, forming a strong network effect. Through user interaction and community participation, the MemeCoin project has quickly accumulated a large number of attention and investors, forming a collective community consensus. When this community consensus reaches a certain "critical point", its market promotion and price increase will accelerate.
The “Fair Game” Theory
Fair Play Theory emphasizes that participants will be more willing to participate in a game or market that they believe is fair.
For MemeCoin, the public distribution mechanism (Fair Launch) of tokens, the decentralization and low threshold for participation in the distribution process, and the transparency of token chips and on-chain liquidity can make ordinary investors feel fair opportunities. All players can participate in investment and trading at the same starting line, so they are more willing to participate, which promotes the spread and market performance of MemeCoin. This mechanism can attract more people to join the MemeCoin hype "game", form a strong community foundation, and further promote its popularity.
MemeCoin History
From the earliest MemeCoin Doge, to sporadic MemeCoin hype, to MemeCoin becoming a hot track and narrative logic, it has gone through several stages:
- Early MemeCoin stage : Early Memecoins were born out of Meme culture and featured a single token, without forming a relatively unified Meme market. The earliest Memecoin was Doge, which benefited from the strength of Doge's online/offline communities and Elon Musk's calls (frequent tweets related to Dogecoin), which promoted the surge in coin prices and the emergence of wealth effects.
- MemeCoin hype in the early stage : This stage is characterized by imitating the style of Dogecoin and focusing on funny and interesting Internet culture. Typical representatives are Shiba Inu , Floki, and Pepe, which attracted the attention of many market users with their unique cultural consensus, large user group size, and huge wealth myths, and promoted the spread of Meme culture and the rise of hype.
- MemeCoin craze : From March 2023 to May 2024, Casey Rodarmor, a core Bitcoin developer, created the Ordinals protocol, which gave rise to a wave of NFT and inscription development on the Bitcoin network. Bitcoin token protocol standards such as BRC20, ORC20, Rune, ARC20, and Taproot Assets have emerged, generating tens of millions of inscriptions. These inscriptions can be counted as MemeCoins on the BTC network, the most famous of which are ORDI, Sats, and Rats.
- Solana MemeCoin speculation boom : In 2023-2024, the Meme market on Solana exploded and began to lead the market, promoting the Meme speculation boom through fair distribution, airdrops, Meme pre-sales, community activities , etc. Typical projects include Bonk, MYRO, SILLY, WIF, BOME, SLERF, etc. Many speculators tried to get rich quickly by buying MemeCoin, resulting in a large number of new MemeCoin projects emerging in the market. These projects usually gain widespread attention in a short period of time through social media, celebrity effects or community hype, but many projects are also accompanied by huge price fluctuations and high risks.
- MemeCoin infrastructure boom : The development and improvement of meme issuance platforms, trading bots and market tools, led by Pump.Fun, further promoted the meme boom by upgrading infrastructure. These platforms and tools greatly facilitated the creation, purchase and trading of MemeCoin, leading to the explosion of Meme.
- MemeCoin speculation diverges : On September 15, 2024, Binance listed three Meme coins (Neiro, Turbo and BabyDoge) in one day, which triggered a dispute over the capitalization of Neiro and NEIRO tokens, and a new round of speculation in the Meme coin market. This round of Meme coin speculation mainly revolves around: the capitalization dispute of the naming letters, donations to Vitalik Buterin and Vitalik Buterin selling coins to pull the market, and the revival of Cult (sarcasm culture) MEME coins . Typical cases are: Neiro/NEIRO, MOODENG, TERMINUS, PAC, etc.
2.MemeCoin Track Analysis
The reason why the MemeCoin track exploded
Overproduction of tokens and trust crisis:
The total number of tokens included in the CoinGecko market website exceeds 140,000, and the number of tokens created on major public chains (including L2) has also increased by tens of thousands. In the first four months of 2024 alone, more than 500,000 new tokens have been launched on the market, with more than 5,000 new tokens added every day.
Compared to before 2017, the number of tokens on the market has increased exponentially. The expansion of the number of tokens has greatly distracted the market's attention, causing the value of many projects to be seriously diluted.
At the same time, more crypto projects and token launches cannot generate stable cash flow, cannot bring long-term business growth and profit expectations, but only hype expectations. Many new tracks, new hot spots, narrative logic, etc. in the past have been falsified after two or three rounds of bull and bear cycles, causing market traders to have a crisis of confidence in the value of tokens.
MemeCoin has been favored by market traders, especially retail investors, because of its fair token issuance mechanism, unique culture and community cohesion that is not dependent on products, and potential wealth-creating effects (100X, 1000X, etc.).
No hot spots in the market
Since the end of the 2021–2022 DeFi Summer bull market cycle, the overall crypto market has fallen into a bear market.
Although crypto practitioners have been chasing new market hot spots, many hot spots have emerged in the market from 2023 to 2024, including BTC ETF and BTC halving, ETH upgrade and ETF, BTC inscription, BTC L2, LRT, AI, TG MiniAPP, etc. However, except for BTC ETF, most other hot spots and narratives have weak sustainability, poor universality, lack of money-making effect, and are far from comparable to the previous market narratives such as DeFi, which have strong sustainability and good innovation.
Most of the market liquidity is concentrated on a few mainstream currencies such as BTC and ETH. The vast majority of altcoins lack liquidity, and the market conditions are bleak.
In an environment where there are no hot spots in the overall market, the demand for MemeCoin has arisen. MemeCoin has obvious wealth-creating effects and a strong community marketing atmosphere, and is very attractive to ordinary retail investors.
The valuation of institutional coins (high market value, low circulation) is seriously inflated
In the previous rounds of crypto market cycles, investment institutions obtained very high returns by investing in crypto projects. As a result, more and more crypto investment funds have emerged. The expansion of the overall capital size of the funds has led to a significant increase in the valuation of crypto start-up projects since 2023 compared to before 2022.
From the projects I have learned about, the vast majority of crypto projects from 2023 to the present have a starting market value of $10-20M. After one or two rounds of financing, the market value is as high as $50M. The FDV after the public round and listing on the exchange is generally above $100M, and the FDV of some star projects is as high as $1B or more.
From 2023 to 2024, popular projects listed on top exchanges Binance and OKX, including ZK, STRK, SAGA, ALT, ENA, ETHFI, W, etc., are all institutional coins. Their typical characteristics on Tokenomics are high FDV and low circulation, as well as a higher public price (compared with the cost price of several rounds of financing).
The amount of funds that can be taken up by the market for altcoins is limited (billions to tens of billions of US dollars). The listing and trading of these overvalued new projects have squeezed the liquidity funds in the market, making it difficult to obtain sustained buying power, resulting in a negative trend after the new coins were listed on the exchange, and the willingness of retail investors to enter the market to take over has been greatly reduced. Moreover, with the continuous unlocking and release of subsequent tokens, the market continues to face huge selling pressure.
The emergence of a large number of institutional coins has led to calls against institutional coins in the market, and even evolved into a performance art, giving rise to the demand for Fair Launch projects. The full circulation and unlocking of MemeCoin during TGE fits well with the psychology of investors. Many retail investors regard MemeCoin as a means to counter the institutional advantages gained from participating in private financing.
MemeCoin Infrastructure
From the history of Meme, we can see that the enrichment and perfection of Meme infrastructure has greatly facilitated the transaction and circulation of Meme track projects.
The launch of Uniswap's innovative AMM DEX product has ushered in the DeFi summer and greatly facilitated the trading of Meme coins. Only a small amount of liquidity needs to be created to start Meme transactions directly on the chain.
The trading bot track boom in 2023 further improved the trading experience of Meme Coin. The mainstream bot track projects on the market include Maestro Bot, Unibot, BananaGun, etc., and their bot trading volume has expanded sharply since 2023. These trading bots can not only set limit orders, copy trading, and block new coins, but also launch special features such as anti-clamp (Anti-MEV), anti-Rug (Anti-Rug) and selling front-running (FrontRun), which improves the user trading experience.
In 2024, the meme issuance platform led by Pump.Fun further promoted the meme fever by upgrading the infrastructure. Pump.Fun greatly simplified the process of creating and trading Memecoin on the blockchain through simple token creation (users only need to enter the token name, token code, image, and pay a small deployment fee), dynamic pricing curve, liquidity mechanism, etc., promoting the democratization, communityization, asset liquidity and convenience of MemeCoin creation. Subsequently, many meme trading platforms emerged, such as SunPump, MakeNow.Meme, Moonshot, Ape.Store, Four.meme, etc.
In addition, there are two types of infrastructure facilities that have also driven the Meme craze. One is a decentralized wallet, and the other is various market software tools such as GMGN, DEXTools, and DEX Screener, which are used to find smart money behavior on the chain, token chip distribution, contract security, etc., and then find opportunities to make profits. These two types of products make it easier for users to find smart money on the chain and discover potential Meme coins, thereby increasing the probability of profitable transactions.
Top Exchanges Favor
Top exchanges such as Binance and OKX have listed MemeCoin one after another, which has also created a good boost for the development of the MemeCoin track. By listing on top exchanges, MemeCoin can greatly improve trading liquidity and market influence. At the same time, the huge user base of top exchanges has also become a potential audience and buying power for MemeCoin.
Generally speaking, the liquidity of MemeCoin traded on DEX is relatively limited, with a market value of tens of millions being its upper limit. By listing on top-level exchanges, its market value upper limit can be raised from tens of millions to hundreds of millions.
The key factors for MemeCoin's success
In general, if MemeCoin wants to succeed, it first needs a fascinating story (Memes cultural narrative). The design of the token and the community culture must be unique and attractive to resonate and stimulate investors' interest, and stand out from many projects. At the same time, there needs to be a strong spontaneous community. An active community is the key to promoting the success of MEME coins. The power of the community can influence market sentiment and investment decisions. In addition, it also needs the support of strong supporters and traders behind it to drive the price of the currency at critical moments.
Memes Culture
MemeCoin is a cultural drive that arouses consensus and popularity through cultural atmosphere. Early Meme coins and many NFTs grew and developed based on specific cultural consensus. Meme coins with cultural consensus have strong survival ability, strong dissemination, universality and acceptance, and can enable users to gain a sense of participation and belonging, as well as a sense of identity with cultural value consensus.
Meme KOL Murad calls this culture "Cult Meme". Cult refers to a highly focused and fanatical following culture, in which fans show extreme enthusiasm and loyalty to a specific thing, such as a person, brand, concept or work. This cultural phenomenon usually revolves around a small but influential group, which distinguishes itself from mainstream culture through common beliefs, behaviors or interests.
Murad believes that the best meme coins have more functions than almost all altcoins. They provide fun, reduce loneliness, and identity recognition - achieving the goals that DAO was supposed to achieve, bringing resonance, emotional connection, a sense of mission and meaning, entertainment, and happiness, and even promoting charity, story creation, and creative construction.
For Memecoin, a strong meme cultural narrative is an important factor in its success. These cultural narratives give Memecoin a strong vitality, promote the cohesion of its community users, and promote its wide dissemination and influence on social media channels. Typical cases include Doge, SHIB, Pepe, Bonk, etc.
Market Hotspots
The market hot spots here refer to those with the characteristics of communication or novelty. In today's highly developed Internet society, these hot spots with communication and novelty characteristics can attract great market attention in a very short time, which is the attention economy.
Based on this, Meme coins launched based on market hot spots can greatly cause FOMO emotions in the market. This type is mainly driven by celebrities (Musk, Trump, Vitalik) and market hot spots (Moodeng).
Meme KOL:
In modern business society, admiration for the strong has become a common consensus phenomenon. In the financial field, top investors have a wider audience. This type of financial KOL has a strong sticky audience group and influence. Through KOL marketing, the spread of Meme can be greatly promoted.
The development and growth of many Meme coins are inseparable from the marketing and promotion of these KOLs. The value of many MemeCoins is almost zero at first, but after KOLs and community hype, market speculation and viral spread, the price can soar rapidly. This attracts a large number of speculators who hope to make huge profits through short-term investment, forming a "wealth effect".
Famous Meme KOLs include Ansem, Murad, etc.
MM push
The development and growth of any MemeCoin is inseparable from the promotion of MM market makers. Due to the unique trading mechanism of AMM, through MM market making, a small amount of funds can cause a huge increase, and the greater the volatility means the higher the potential profit expectation. Through MM market making, the money-making effect of MemeCoin can be improved.
For MemeCoin, only if there is a potential expectation of money-making effect will someone come to take over and promote the full turnover of MemeCoin chips. MemeCoin without turnover has no future.
For many MemeCoins, there have been many times in their historical cycles where the price of the currency has fallen by 80%, and then it has risen again to break new highs in market value. This is a situation where MemeCoin has seen a change of dealers. The early project parties have completed their sales and exited, and new MM funds have taken over to continue the speculation, promoting the continuation of the MemeCoin story.
CTO
In the crypto world, a community takeover (CTO, Community Take OVer) occurs when the original developer (DEV) of a crypto project steps down and lets the community take over the leadership of the project.
The CTO’s actions include: creating new social media accounts (Twitter), increasing the project’s visibility on social networks, collaborating with influential figures and launching various initiatives, and investing in advertising on market software (such as DEX Screener, DEXTools).
The main purpose of CTO is to attract users' attention, expand the influence of the fan base and Meme coin community, and generate trading demand for Meme coins by operating and maintaining the community.
When a MemeCoin project is appointed by CTO, it means that for retail investors, the risk of insider trading by developers is eliminated, and the project development is led by the community. For example, the disappearance of Satoshi Nakamoto and the rise of Bitcoin can perhaps be seen as the most classic CTO model.
More successful Meme CTO cases include $POPCAT, $WIF, and $SPX.
3. MemeCoin Market Size
According to CoinMarketCap, the entire MemeCoin market size is $53.5 billion, accounting for about 2.4% of the total cryptocurrency market value of $2.4 trillion.
The top 10 MemeCoins by market capitalization include Doge, SHIB, PEPE, WIF, BONK, FLOKI, POPCAT, BRETT, NEIRO, and MOG. These MemeCoins are mainly distributed on Ethereum and Solana chains.
As the MemeCoin market grows, they are no longer a tool for short-term speculation, but become an important narrative track and market trend in the crypto market, an important part of the crypto market and crypto community, and an important driving force for the development of the crypto market.
The change in MemeCoin's status (from short-term hype to becoming an important narrative track) indicates that the market size of MemeCoin will grow accordingly. Judging from the market value and volume of mature tracks in the current crypto market, the market value of MemeCoin will gradually increase, and we can make an optimistic prediction:
- The total market value of the MemeCoin track: from the current 50 billion US dollars to 1 trillion US dollars, and from 2.4% to 8-10%.
- Top MemeCoin Market Cap: There will be 1-2 MemeCoins with a market cap of more than $100 billion, and 5-10 MemeCoins with a market cap of more than $10 billion (currently there are 2, DOGE and SHIB);
- Top 100 Market Cap Share: There will be 10–30 MemeCoins ranked in the top 100 of the crypto token market cap rankings (currently there are 9).
- MemeCoin purchases: More investors, venture capital firms, institutional traders, and traditional financial institutions will invest in and trade MemeCoin.
- MemeCoin Community: The size of the MemeCoin community will further expand, and its unique cultural consensus and market consensus will further gain the trust of investors and maintain lasting vitality.
4. MemeCoin Ecosystem Map
There are currently more than several million MemeCoins on the market. The vast majority of MemeCoins have died out before their community consensus reaches a certain "critical point". Only a very small number of MemeCoins can succeed and form a positive cycle of cultural consensus, price, and market value.
There are several typical MemeCoin cases on the market:
$DOGE:
Dogecoin is one of the earliest MemeCoins, created by Billy Markus and Jackson Palmer in 2013 and inspired by the popular "Shiba Inu" meme. Dogecoin was originally created to satirize Bitcoin and other cryptocurrencies, but quickly gained popularity, especially in communities such as Reddit.
Dogecoin has no clear practical application scenarios, and is more of a community reward tool or entertainment cryptocurrency. Its price is highly volatile, especially driven by Elon Musk's tweets. It soared sharply in 2021, with the price rising rapidly from $0.007 to $0.73, a 100-fold increase, and its highest market value exceeded $80 billion, creating the first wave of Meme-made-wealth myths.
$SHIB:
Shiba Inu is a MemeCoin launched in 2020, positioned by its creators as a "Dogecoin killer". It is an ERC-20 token based on the Ethereum blockchain.
The SHIB community has promoted its rapid popularity through social media and crypto platforms, and gradually combined it with DeFi and NFT to increase its practicality. Compared with the pure narrative style of other MemeCoins, SHIB is characterized by the construction of a relatively complete ecosystem, including decentralized exchanges (ShibaSwap), EVM-based L2 chains (Shibarium), game ecosystem Shiba Games (launched a collectible card game Shiba Eternity), and Shiba Metaverse (including NFT and land).
$PEPE:
PepeCoin is a cryptocurrency based on internet pop culture, inspired by the globally famous meme character "Pepe the Frog". Pepe is a representative image of internet humor and culture, used to express a variety of emotions and ideas.
PepeCoin emphasizes entertainment and community promotion, and has quickly become popular thanks to Pepe's global cultural influence. The popularity of PepeCoin relies on the community's identification with and sense of humor about the image of Pepe, and has attracted a large number of speculators.
$PEOPLE
ConstitutionDAO is a crowdfunding campaign to purchase a first edition of the United States Constitution.
PEOPLE is a token that represents shares in ConstitutionDAO. As the bid for the document failed, the PEOPLE token now represents a historic DAO movement.
Currently, there is no clear use case for the PEOPLE token as the founding team has chosen to shut down the project and burn the multisig that controlled the raised funds.
$BONK:
BONK is a MemeCoin launched on the Solana blockchain in late 2022, claiming to be "the first Dogecoin created for the Solana community." It intends to revitalize the Solana community through decentralization and community participation.
BONK is characterized by its extensive token distribution mechanism, with 50% of the tokens distributed to the Solana community through airdrops. Its launch was timed to coincide with the downturn in the Solana community, helping it regain market attention.
BONK is considered a symbol of the Solana community, attracting a large number of users to participate and gaining certain practicality by integrating with Solana's DApp and ecosystem.
$WIF
WIF (What If) is a relatively new MemeCoin, created based on online discussions and fantasies triggered by the philosophical question of "what if". WIF hopes to use this open form of discussion to attract users to imagine various possibilities for the future.
WIF emphasizes community interaction and creativity. Users can express various "hypothetical" questions and future scenarios on the platform through tokens. It is mainly spread and built through social platforms.
$BOME
BOME is BOOK OF MEME (BOME) released by Pepe Meme artist Darkfarm. It is an experimental project that redefines web3 by integrating memes, decentralized storage solutions, and reducing shitcoin transactions and gambling.
BOME is mainly issued through community pre-sale. Users can get BOME airdrops by sending SOL. Within three days of its launch, the price of BOME has increased 50 times, with a market value of over 1.1 billion US dollars, and a peak of nearly 1.5 billion US dollars. The number of addresses holding the coin has exceeded 30,000+, and it has been listed on top exchanges such as Binance, becoming the fastest MemeCoin to be listed on Binance.
Affected by the BOME craze, the number of memes issued on the Solana network surged in a short period of time, and the number of active addresses on the network reached a peak in nearly a month.
$POPCAT
POPCAT is a MemeCoin inspired by the " Cat with Open Mouth " meme on the Internet, which itself comes from a video clip of a cat with its mouth wide open. POPCAT is one of the most popular funny images used by Internet users.
POPCAT is based on its unique humorous image and Internet popular culture, and the community drives its market growth. Although it does not have complex technical functions, its meme culture is widely circulated and has become a cultural symbol.
POPCAT’s success is entirely dependent on the virality of its memes, which have captured the attention of a large number of Internet users.
$DOGS
DOGS is a Ton MemeCoin born within the Telegram community, designed to leverage Telegram’s massive user base and native meme culture.
Centered around a beloved dog mascot originally drawn by Telegram founder Pavel Dorov, DOGS aims to introduce blockchain to millions of people through apps and tokenized stickers, fostering a fun and engaging ecosystem with a focus on community ownership and fair rewards distribution.
The number of DOGS Mini APP users exceeds 50 million, and the vast majority of tokens (81.5%) are sent to community users through airdrops.
$NEIRO
The name of the NEIRO token originally originated from the prototype of Dogecoin. On May 24 this year, the prototype of DOGE, Kabosu, passed away, which caused mourning in the crypto community. In addition to mourning, Kabosu's owner announced on the X platform that she adopted a new Shiba Inu, whose English name was translated as 'NEIRO'. Then, multiple MEME projects with the same name were generated, covering public chains such as Solana and Ethereum, and there are different MEME projects with different capitalizations on the same chain. Currently, there are only two case-sensitive NEIRO and Neiro on the Ethereum chain.
The naming strategy of Neiro and NEIRO was originally intended to distinguish different projects, hoping to use the difference in uppercase and lowercase letters to attract user attention. However, Binance's simultaneous launch of NEIRO contracts and Neiro spot transactions has made the dispute over the capitalization of MEME coins a new hype.
$GOAT
$GOAT is an AI concept Meme coin. Unlike traditional Meme coins, its promoter is an AI named @truth_terminal.
@truth_terminal is a fine-tuned OPUS model that is trained on data from sites like Reddit and 4chan to generate content and interact with users. In the process of talking to himself, @truth_terminal created the "Gospel of Goatse", which is a fusion of traditional religions such as Buddhism and Gnosticism (Christianity, Judaism) and presented in a modern meme format.
When a third party airdropped $GOAT to this AI through the Pump.fun platform, the AI quickly incorporated the token into its own "personality" and actively promoted the market sentiment of $GOAT. By generating a large number of tweets and interacting with the community, the AI closely tied $GOAT to itself, forming a unique narrative and symbolic image.
Based on AI confirming $GOAT as its official token and frequently posting articles, A16Z founder's tweets mentioning it, market KOL support and investor FOMO, etc., the explosion of $GOAT was jointly driven. The market value of $GOAT rose sharply in a short period of time, exceeding US$300 million (maximum US$460 million) in 5 days, and the coin price increased by more than 10,000 times.
5. MemeCoin investment strategy and tool usage
MemeCoin Profit Analysis
According to the pump.fun platform transaction data published by @arndxt_xo on social media, MemeCoin’s profitability is extremely low:
- Only 70 traders (0.0028%) made more than $1 million in profit;
- Only 924 traders (0.037%) made more than $100,000 in profit;
- 11,936 traders (0.477%) made more than $10,000 in profit;
- 76,567 traders (3.061%) made a profit of more than $1,000;
- Only 20% of traders make a profit, while the remaining 80% suffer losses.
It can also be seen from some other data analysis and feedback from market traders that the MemeCoin market is highly speculative, and price changes are mainly driven by community sentiment, social media hype and market FOMO (fear of missing out) psychology. As a result, only a few investors in MemeCoins speculation can sell at the top of the market and make a profit, and most retail investors may suffer losses due to market fluctuations.
Therefore, the investment and trading strategies of MemeCoin are quite different from the investment logic of other traditional crypto tokens, and require certain investment strategies and tools to assist.
MemeCoin Investment Strategy
"Meme New Leader" Murad believes that Cult will become the next trend. By studying on-chain data, market value, degree of decentralization and other indicators, he focuses on finding undervalued Meme coins that meet most of his screening criteria. The Meme coin screening criteria he proposed include:
- Focus on mid-cap coins with a market cap between $5 million and $200 million;
- Prefer Solana and Ethereum, excluding Base, Ton, and Sui, because whales will park their wealth on the first two;
- Projects that are at least six months old;
- A project that has experienced at least two 70% plunges.
We can use this to screen MemeCoin targets, and in terms of specific investment strategies, we need to pay attention to the following three points:
1. Short-term operation strategy
- Track market sentiment in a timely manner : Since the price of MemeCoin depends heavily on social media and community sentiment, investors need to keep an eye on the discussion heat on social media (such as Twitter, Reddit, Telegram), especially the movements of celebrities or big Vs. Selling before the market heat reaches its peak is the key to short-term operations.
- Quick profit taking : The market cycle of MemeCoin is usually short, and the price may quickly fall back after a rapid rise. Therefore, short-term investors should set clear profit targets and quickly take profits to avoid being driven by market sentiment and missing selling opportunities. For traders who want to hold MemeCoin for a long time, they need to choose popular MemeCoins with strong community support and user consensus, and with a long history of listing on top exchanges, such as Doge, SHIB, and PePe.
2. Early-stage investment strategy
- Participate in early project airdrops or fair distribution : By participating in MemeCoin's early airdrops or fair distribution activities, obtaining tokens at a very low cost is a good way to reduce risk. Since the early price is low, the risk is relatively controllable, and there is a greater possibility of obtaining rich returns when the project heats up.
- Targeting low-market-cap projects : Some investors focus on MemeCoin projects with low market capitalization that have not yet received widespread attention, waiting for market attention to increase and then quickly make a profit. The risk of this strategy lies in whether these small-cap projects can attract market attention, but if successful, the returns are greater.
3. Risk management strategy
- Set a stop loss line : Due to the high volatility of MemeCoins, investors should set a stop loss line in advance. Once the price falls below a certain critical point, the tokens will be automatically sold to reduce losses. This is especially important for short-term investors, because prices often fluctuate violently in a short period of time. Generally, TG BOT is used to set operations such as single orders, copy orders, and stop-loss and take-profit orders.
- Reasonable diversification of investment : In order to avoid the risk of a single project, investors can spread their funds to multiple MemeCoin projects to reduce the loss caused by the price fluctuation of individual projects. In addition, MemeCoin investment should only account for a small part of the investment portfolio, and the rest should be invested in crypto assets or traditional assets with lower risks. For a single MemeCoin, the investment amount should be relatively small.
MemeCoinTools
In terms of tool assistance, investors can use various tools to analyze MemeCoin and seize investment opportunities. The use of tools to analyze MemeCoin is mainly based on the following aspects:
- Chip distribution: Use tools and on-chain browsers to analyze the distribution and unlocking of Memecoin chips. Generally, the more dispersed the chips are, the more market-oriented they are; the more concentrated the chips are, the more likely they are to be ripped off. Tools include Bubblemaps.io , browser Etherscan, etc.
- Social and market sentiment analysis: Mainly through social platforms such as Twitter, Discord, Telegram, etc. to analyze Memecoin's community audience, market activity and Kol situation. The larger the number of social users, the more active the community interaction, and the more positive the user sentiment, the stronger the community consensus. Mainly through lunarcrush.com for analysis.
- Contract analysis: Use tools and on-chain browsers to analyze the Memecoin contract address to check whether there is a Pixiu disk (can only buy but not sell), whether there is a transaction tax, whether there are security risks or hidden dangers (contracts can be modified, whether there is a blacklist/whitelist mechanism, etc.), whether the on-chain LP liquidity is locked/destroyed, and whether the liquidity is sufficient. If the score after detection is lower than 60, you need to be cautious. Commonly used tools include https://tokensniffer.com
- Market value and life cycle analysis: By analyzing its LP liquidity, circulating market value, and FDV, its potential and life cycle can be judged. For most MemeCoins, their life cycle can be simply analyzed by market value (early stage: ≤$1M, mid-term: $1M — $20M; mature stage: ≥$100M). In the early and mid-term stages (FDV≤$10M), there is speculative potential. Memecoins with more than 20 million FDV are generally in the middle and late stages of development, and their speculative value is weak. They need strong expectations from listed exchanges (Binance, OKX, Coinbase, Bithumb) to generate better liquidity and user buying before they have development potential. FDV exceeds $100M, which means it is a mature Memecoin, with weak speculative attributes and enhanced investment value.
- Liquidity and MM analysis: Generally, the better the LP liquidity and the more LP liquidity is locked, the safer it is. At the same time, through the daily trading volume and K-line analysis during the observation period, whether there are MMs and strong dealers, strong MMs and better trading volume mean that it is more convenient to buy and exit, and there is potential space.
The more commonly used MemeCoin market auxiliary tools include the following:
GMGN: https://gmgn.ai , a market trading software, whose functions include new coin discovery, smart money tracking, coin price signals, K-line market information, trading, TG trading BOT, chip distribution, security detection and other functions.
DEXSCREENER： https://dexscreener.com Market trading software, its functions include new token tracking, personal portfolio, watchlist, signal alarm reminder, K-line market, trading, chip distribution, security detection and other functions.
Dextools: https://www.dextools.io , a long-established market trading software, whose functions include daily popular token list, token pool tracking, on-chain large transaction tracking, token creation, K-line market conditions, trading BOT, trading and buying and selling, etc.
Social media analysis: Lunarcrush ( https://lunarcrush.com ) is a social media analysis tool used to analyze the market influence of social media and crypto assets and understand market sentiment through visual data. TwitterScore ( https://twitterscore.io ) is used to analyze the Twitter accounts of tokens and KOLs, including the number of followers, creation date, score, top followers, etc.
Trading BOT: Trading BOT is usually used to place orders, automatically stop profit and stop loss, copy smart wallets and other operations. You can select TG Bots on different chains through the Bots data on Dune https://dune.com/rolandgem/tg-bot-landscape .
Security monitoring tools: token security monitoring https://gopluslabs.io , contract address monitoring honeypot.is , chip distribution tool bubblemaps.io , Rug detection https://rugcheck.xyz
6. Summary
MemeCoins are a unique phenomenon in the cryptocurrency market. They rely on Internet pop culture (Meme), the spread of social media and community consensus, rather than technological innovation or practical application. The core value of MemeCoins comes from the "attention economy", which attracts user attention and speculative capital influx through meme culture and viral network dissemination.
MemeCoins usually have no clear application scenarios or product support, but are more of a cultural symbol that reflects the collective mood of the Internet era and the speculative psychology of the market. Their prices are extremely volatile, and investors often profit from short-term changes in market sentiment, but most users face losses after the market bubble bursts.
The emergence of MemeCoins reflects the new trend of the intersection of Internet culture and financial markets. It is not only a product of market hype, but also a manifestation of community-driven power. In the future, MemeCoins may continue to gain market popularity through cultural influence and network dissemination, but its investment risks cannot be ignored.
When it comes to MemeCoins investment, successful strategies often include sensitive observation of social media trends, timely entry and exit, and strict risk management. Due to its high degree of speculation and uncertainty, investing in MemeCoins should be considered a high-risk behavior. Investors need to be cautious and control their investment ratio to avoid becoming victims of PVP.
7. References:
1. Memecoin Super Cycle: A Revolution that Subverts Traditional Crypto Narratives
https://www.techflowpost.com/article/detail_20718.html
2.The Memeing of Money: Game Theory Meets Memes
https://medium.com/neworderdao/the-memeing-of-money-game-theory-meets-memes-ed683c67c765
3. Who is Murad, the "new meme leader" who has gone viral? Meme holdings exceed $24 million, and institutions were called in within 20 minutes
https://www.theblockbeats.info/news/55303?from=telegram
4. Taking stock of the various "Pump.fun" chains, where can you go to make money?
5. What exactly happened in the blockchain industry?
https://x.com/Ryanqyz_hodl/status/1821045231539872101
6. Locked in “paper wealth”, VCs encountering a “hell difficulty” cycle
7.Binance Research: Low circulation and high FDV tokens are prevalent. Why has the market developed to this point?
https://www.theblockbeats.info/news/53577
8. Why do you think Pepe has a higher ceiling than Ordi?
https://x.com/_0xSea_/status/1802502501671092581
9. A 10,000-fold surge in five days: An in-depth review of $GOAT’s journey to $300 million
https://news.marsbit.co/20241017001514833985.html
10. Memecoin Toolbox 3.0
