Written by: Web3Port Foundation
Recently, Murad Mahmudov delivered a keynote speech entitled "Memecoin Super Cycle" at Token2049, which received more than one million views and interactions, triggering a great deal of discussion about MemeCoin.
MemeCoin's relatively fair public distribution logic and unique community cultural value have made it an important narrative and hot spot in the current market. Its huge trading volume and huge price fluctuations have attracted 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.
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 the promotion of social media and communities to gain popularity through viral transmission.
MemeCoin generally has certain common characteristics:
The project narrative is easy to understand and spread, and does not contain abstract concepts;
There is no clear technical innovation, complex products or actual income support;
It contains a certain memes culture, which can cause a certain degree of interaction or emotional resonance;
It mainly relies on the promotion and marketing of social media and user communities;
Tokens are distributed fairly, and the tokens themselves have no clear utility and purpose.
Because MemeCoin is related to classic memes, funny pictures or celebrities, its price volatility is very large, and it 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.
Although MemeCoin and traditional crypto projects (such as public chains, DeFi protocols, Dapps, etc.) are both in the field of cryptocurrency, they have significant differences in core values, driving forces, and market understanding and reaction methods.
In summary, traditional crypto projects focus on technological innovation, application scenarios and product development, have complex market narratives and valuation models, and support Token value based on long-term market expectations and the revenue capabilities of actual products.
MemeCoin is completely dependent on social media hot 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 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 combining Internet culture with the capital market and demonstrates the influence of the attention economy in the field of cryptocurrency.
The popularity of MemeCoin can be mainly explained by three principles in economics: irrational prosperity, network effects, and fair distribution needs. These principles together explain the phenomenon that MemeCoin can quickly spread in the market and gain high attention in the absence of technical support or intrinsic value.
The concept of "irrational exuberance" was proposed by economist Robert Shiller, who pointed out that the driving force behind the rise in asset prices is not the intrinsic value of the assets or rational analysis, but more from investors' emotions, market hype and speculation.
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 has risen sharply in a short period of time, and the wealth effect of early investors has attracted more people to try to participate because of FOMO (fear of missing out). This short-term huge gain and "get-rich-quick myth" further exacerbated the speculative sentiment in the market, causing more investors to ignore the actual value of MemeCoin, thus driving irrational prosperity.
Network effect refers to 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 application, 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 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.
Fair Game Theory emphasizes that participants are 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 participation of 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.
From the earliest MemeCoin Doge, to sporadic MemeCoin hype, and then to MemeCoin becoming a hot track and narrative logic, it has gone through several stages:
Early MemeCoin Stage: Early Memecoin was born out of Meme culture, featuring a single token, and did not form a relatively unified Meme market. The earliest Memecoin was Doge. Thanks to the strength of Doge's online/offline communities and Elon Musk's calls (frequent tweets related to Dogecoin), the price of the currency skyrocketed and the wealth effect appeared.
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.
Inscription MemeCoin craze: Starts in March 2023-In May 2024, with the creation of the Ordinals protocol by Bitcoin core developer Casey Rodarmor, a development boom of NFT and inscriptions on the Bitcoin network was born. Bitcoin token protocol standards such as BRC20, ORC20, Rune, ARC20, Taproot Assets, etc. appeared one after another, generating tens of millions of inscriptions. These inscriptions can be counted as MemeCoin 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 broke out 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 quick wealth 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 fever: The development and improvement of meme issuance platforms, trading bots and market tools, led by Pump.Fun, further promoted the meme fever by upgrading infrastructure. These platforms and tools greatly facilitated the creation, purchase and trading of MemeCoin, leading to the outbreak of Meme.
MemeCoin hype differentiation: On September 15, 2024, Binance listed 3 Meme coins (Neiro, Turbo and BabyDoge) in one day. After the subsequent dispute over the capitalization of Neiro and NEIRO tokens, a new round of hype in the Meme coin market was set off. This round of Meme coin hype mainly revolves around: the dispute over the capitalization of the naming letters, V God's donation and V God's selling of coins to pull the market, and the revival of Cult (sarcasm culture) MEME coins. Typical cases are: Neiro/NEIRO, MOODENG, TERMINUS, PAC, etc.
Overproduction of tokens and trust crisis:
The total number of tokens included on 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, resulting in the serious dilution of the value of many projects.
At the same time, the launch of more crypto projects and tokens 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, resulting in a crisis of confidence in the value of tokens among market traders.
MemeCoin has been favored by market traders, especially retail investors, because of its fair token chip issuance mechanism, unique culture and community cohesion that does not rely on products, and potential wealth creation effects (100X, 1000X, etc.).
Since the end of the DeFi Summer bull market cycle in 2021–2022, the crypto market as a whole has fallen into a bear market.
Although crypto practitioners have been chasing new market hot spots, from 2023 to 2024, many hot spots have emerged in the market, 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 being comparable to the previous market narratives such as DeFi, which have strong sustainability and good innovation.
Most of the market liquidity is focused on a few mainstream coins such as BTC and ETH, and most of the altcoins lack liquidity, and the market situation is bleak.
In the absence of hot spots in the overall market, the demand for MemeCoin has been spawned. MemeCoin has an obvious wealth-creating effect and a strong community marketing atmosphere, which is very attractive to ordinary retail investors.
In the previous rounds of crypto market cycles, investment institutions obtained high returns by investing in crypto projects, so more and more crypto investment funds have emerged. The expansion of the overall fund size has led to a significant increase in the valuation of crypto start-up projects since 2023 compared to before 2022.
From the projects I know, most of the crypto projects from 2023 to now 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 of the public round and after listing on the exchange is generally above $100M, and the FDV of some star projects is as high as $1B and above.
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 higher public prices (compared to the cost price of several rounds of financing).
Originally, 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 decline in the new coins after they are 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. MemeCoin was fully circulated and unlocked during TGE, which fits the psychology of investors very well. Many retail investors regard MemeCoin as a means to counter the institutional advantages obtained by participating in private financing.
From the history of Meme, we can see that the enrichment and improvement of Meme infrastructure has greatly facilitated the trading and circulation of Meme track projects.
The launch of Uniswap's innovative AMM DEX product has opened the DeFi summer and greatly facilitated the trading of Meme coins. Only a small amount of liquidity needs to be created to directly start Meme transactions on the chain.
The trading Bot track boom in 2023 has further enhanced the trading experience of Meme coins. 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 trades, and block new coins, but also launch special features such as Anti-MEV, Anti-Rug, and FrontRun to enhance the user trading experience.
In 2024, Meme distribution platforms led by Pump.Fun further promoted the meme craze by upgrading infrastructure. Pump.Fun greatly simplifies 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 curves, liquidity mechanisms, etc., promoting the democratization, communityization, asset liquidity, and convenience of trading of MemeCoin. Subsequently, many Meme trading platforms emerged, such as SunPump, MakeNow.Meme, Moonshot, Ape.Store, Four.meme, etc.
In addition, there are 2 types of infrastructure facilities that have also promoted the Meme craze. One is a decentralized wallet, and the other is various market software tools 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 facilitate users to find smart money on the chain and discover potential Meme coins, thereby increasing the probability of profitable transactions.
Top exchanges such as Binance and OKX have successively launched MemeCoin, 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, and its market value is tens of millions. By listing on top-level exchanges, its market value can be raised from tens of millions to hundreds of millions.
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.
MemeCoin is a cultural drive that arouses consensus and enthusiasm through cultural atmosphere. Early Meme coins and many NFTs have grown and developed based on a 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 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, distinguishing 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 - they achieve the goals that DAO was supposed to achieve, bring resonance, emotional connection, a sense of mission and meaning, entertainment, and happiness, and even promote charity, story creation, and creative construction.
For Meme coins, strong meme cultural narratives are an important factor in their success. These cultural narratives give Meme coins strong vitality, promote the cohesion of their community users, and widely spread and expand their influence on social media channels. Typical cases include Doge, SHIB, Pepe, Bonk, etc.
Market hotspots here refer to market hotspots with dissemination or novelty characteristics. In today's highly developed Internet society, these hotspots with dissemination and novelty characteristics can attract great market attention in a very short time, that is, the attention economy.
Relying on this, Meme coins launched based on market hotspots can greatly cause FOMO emotions in the market. This type is mainly driven by celebrities (Musk, Trump, Vitalik) and market hotspots (Moodeng).
In modern commercial 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, it can greatly promote the spread of Meme.
The development and growth of many Meme coins are inseparable from the marketing and promotion of these KOLs. The value of many MemeCoins was almost zero at first, but after KOLs and community hype, market speculation and viral spread, the price can soar rapidly. This attracted 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.
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, the higher the potential profit expectation. Through MM market making, the money-making effect of MemeCoin can be improved.
For MemeCoin, only when there is a potential expectation of making money will someone take over and promote the full turnover of MemeCoin chips. MemeCoin without turnover has no future.
For many MemeCoins, there have been many cases in their historical cycles where the price of the currency has fallen by 80%, and then the market value has risen again and broken through a new high. This is the situation where MemeCoin has changed dealers. The early project parties have finished dumping and exited, and new MM funds have continued to hype and promote the continuation of the MemeCoin story.
In the crypto world, when the original developer (DEV) of a crypto project exits and lets the community take over the leadership of the project, a community takeover (CTO, Community Take OVer) occurs.
CTO's actions include: establishing new social media accounts (Twitter), increasing the visibility of the project on social networks, cooperating with influential figures and launching various plans, and investing in advertising on market software (such as DEX Screener, DEXTools).
The main purpose of the CTO is to attract users' attention by operating and maintaining the community, expand the influence of the fan base and the Meme coin community, and generate trading demand for Meme coins.
After a MemeCoin project is CTO, it means that for retail investors, the risk of developers' insider trading is eliminated, and the project development is led by the community. For example, the disappearance of Satoshi Nakamoto and the rise of Bitcoin may be regarded as the most classic CTO model.
Relatively successful Meme CTO cases include $POPCAT, $WIF, and $SPX.
According to CoinMarketCap data, the entire MemeCoin market size is $53.5 billion, accounting for about 2.4% of the entire cryptocurrency market value of $2.4 trillion.
The top 10 MemeCoins by market value 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 speculation 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 optimistic predictions about it:
Total market value of MemeCoin track: from the current more than 50 billion US dollars to a market value of 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);
Top100 Market Cap Share: There will be 10-30 MemeCoins with a market cap ranking within the Top100 of the Crypto Token Market Cap Ranking (currently there are 9).
MemeCoin Purchase: There will be more investors, venture capital firms, institutional traders, and traditional financial institutions investing in and trading 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.
There are more than a few million MemeCoins on the market, and most of them have died 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 MemeCoins on the market:
Dogecoin is one of the earliest MemeCoins, created by Billy Markus and Jackson Palmer in 2013, inspired by the popular "Shiba Inu" meme on the Internet. Dogecoin was originally created to satirize Bitcoin and other cryptocurrencies, but quickly became popular, 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 volatility is very large, especially driven by Elon Musk's tweets. It has soared sharply in 2021, with prices rising rapidly from $0.007 to $0.73, a 100-fold increase, and a peak market value of more than $80 billion, creating the first wave of Meme wealth myths.
Shiba Inu is a MemeCoin launched in 2020, and its creator positioned it 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 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 a decentralized exchange (ShibaSwap), an EVM-based L2 chain (Shibarium), a game ecosystem Shiba Games (which launched a collectible card game Shiba Eternity), and Shiba Metaverse (including NFT and land).
PepeCoin is a cryptocurrency based on Internet pop culture, inspired by the world-famous meme character "Pepe the Frog". Pepe is a representative image of Internet humor and culture, and is used to express various emotions and ideas.
PepeCoin emphasizes entertainment and community promotion, and has quickly become popular with Pepe's global cultural influence. The popularity of PepeCoin relies on the community's recognition and sense of humor of the image of Pepe, and has attracted a large number of speculators.
ConstitutionDAO was a crowdfunding campaign to purchase the first edition of the United States Constitution.
PEOPLE is a token representing shares in ConstitutionDAO. Due to the failed bid for the document, the PEOPLE token now represents a historic DAO campaign.
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 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 reinvigorate the Solana community through decentralization and community engagement. BONK is characterized by its extensive token distribution mechanism, with 50% of tokens distributed to the Solana community through airdrops. It was launched at a time when the Solana community was in a slump, 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 through integration with Solana's DApps 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, and users can express various "hypothetical" problems and future scenarios on the platform through tokens. It is mainly spread and community built through social platforms.
BOME is BOOK OF MEME (BOME) issued by Pepe Meme artist Darkfarm. It is an experimental project that redefines web3 by integrating memes and decentralized storage solutions to reduce shitcoin transactions and gambling.
BOME is mainly issued through community pre-sales, and users receive BOME airdrops by sending SOL. Within three days of its birth, the price of BOME has increased 50 times, with a market value of over $1.1 billion and a peak of nearly $1.5 billion. 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 meme issuances on the Solana network has surged in a short period of time, and the number of active addresses on the network has reached a peak of nearly a month.
POPCAT is a MemeCoin inspired by a meme on the Internet called "Open Mouth Cat". The meme itself comes from a video clip of a cat with its mouth wide open. POPCAT is one of the funny images that Internet users are keen to use.
POPCAT is based on its unique humorous image and Internet pop 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 relies entirely on the viral spread of its meme, which has attracted the attention of a large number of Internet users.
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 reward distribution.
The DOGS Mini APP has over 50 million users, with the vast majority of tokens (81.5%) being sent to community users via airdrops.
The NEIRO token name 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 case 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 capitalization to attract user attention. However, Binance's simultaneous launch of NEIRO contracts and Neiro spot has made the capitalization dispute of MEME coins a new hype.
$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 large model that is trained based on data from websites such as 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) at its core, and presented in the form of modern memes.
When a third party airdropped $GOAT to this AI through the Pump.fun platform, the AI quickly incorporated the token into its "personality" and actively promoted the market sentiment of $GOAT. By generating a large number of tweets and interacting with the community, the AI closely bound $GOAT to itself, forming a unique narrative and symbolic image.
Based on the fact that AI confirmed $GOAT as its official token and frequently posted articles, the founder of A16Z mentioned it in tweets, the market KOL support and investor FOMO jointly promoted the outbreak of $GOAT. The market value of $GOAT rose sharply in a short period of time, breaking through $300 million in 5 days (up to $460 million), and the price of the coin rose by more than 10,000 times.
According to the pump.fun platform transaction data published by @arndxt_xo on social media, the profit rate of MemeCoin is extremely low:
Only 70 traders (0.0028%) made a profit of more than 1 million US dollars;
Only 924 traders (0.037%) made a profit of more than 100,000 USD; 11,936 traders (0.477%) made a profit of more than 10,000 USD; 76,567 traders (3.061%) made a profit of more than 1,000 USD; Only 20% of traders made a profit, while the remaining 80% suffered losses.
From some other data analysis and feedback from market traders, it can be seen 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, resulting in only a few investors being able to sell at the top of the market and make a profit in MemeCoins speculation, 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 encrypted tokens, and certain investment strategies and tools are needed.
"The new meme leader" Murad believes that Cult will become the next trend. By studying indicators such as on-chain data, market value, and degree of decentralization, he focuses on finding undervalued Meme coins that meet most of his screening criteria. The Meme coin screening criteria it proposed include:
Focus on medium-sized market capitalization currencies between 5 million and 200 million US dollars;
Prefer Solana and Ethereum, and exclude Base, Ton, and Sui, because whales will park their wealth on the former two;
Projects with at least six months of history;
Projects that have 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
Timely tracking of market sentiment: Since the price of MemeCoin depends largely on social media and community sentiment, investors need to always pay attention to 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 also quickly pull 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 investment strategy
Participate in early project airdrops or fair distributions: By participating in early airdrops or fair distribution activities of MemeCoin, obtaining tokens at a very low cost is a good way to reduce risks. Due to the low price in the early stage, the risk is relatively controllable, and there is a greater possibility of obtaining rich returns when the project heats up.
Lock in low-market-cap projects: Some investors focus on MemeCoin projects with low market capitalization and have not yet received widespread attention, waiting for market attention to increase and make quick profits. The risk of this strategy lies in whether these small-cap projects can attract market attention, but if successful, the returns are large.
3. Risk Management Strategy
Set a stop loss line: Due to the extremely 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. TG BOT is generally used to set operations such as lonely orders, copy orders, stop profit and stop loss.
Reasonable diversification: In order to avoid the risk of a single project, investors can spread their funds to multiple MemeCoin projects to reduce losses caused by price fluctuations 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.
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 chip distribution and unlocking of Memecoin. Generally, the more dispersed the chips are, the more market-oriented they are, and the more concentrated the chips are, the more likely they are to be Rug or cut leeks. Tools include Bubblemaps.io, browser Etherscan, etc.
Social and market sentiment analysis: mainly through Twitter, Discord, Telegram and other social platforms 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 Memecoin's contract address, 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, there is a black/white list 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 exceeding $100M is a mature Memecoin, its speculative attributes are weak, and its investment value is enhanced.
Liquidity and MM analysis: Generally, the better the LP liquidity, 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 good trading volume represent 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, market trading software, its functions include new coin discovery, smart money tracking, coin price signals, K-line market, 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, its functions include daily popular token list, token pool tracking, large-amount transaction tracking on the chain, token creation, K-line market, trading BOT, trading and other functions.
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 and other information.
Trading BOT: Trading BOT is usually used to place orders, automatically take 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
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 do not have clear application scenarios or product support. They are more of a cultural symbol that reflects the collective emotions of the Internet era and the speculative psychology of the market. Their prices are extremely volatile. 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 interweaving of Internet culture and financial markets. It is not only a product of market speculation, but also a manifestation of community-driven power. In the future, MemeCoins may continue to gain market popularity through cultural influence and network communication, but its investment risks cannot be ignored.
In 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 regarded as a high-risk behavior. Investors need to be cautious and control the investment ratio to avoid becoming victims of PVP.
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