Author: Jam, CloudY
Editor: Vincero, YL
Review: Yasmine
Meme Coin, as a cryptocurrency full of spoofs and entertainment, attracts investors through the expression of group carnival atmosphere and group spirit.
overview
It is not difficult to find that the successful spread of Meme Coin is closely related to the spread of emoticons, rebellious culture and the large amount of attention brought by the "myth of getting rich quickly". In addition, the role of big Vs such as Musk in the Meme Coin market cannot be ignored. His words and deeds have a very important impact on the market value of related projects. Reviewing the Meme market trends, it can be considered that the Meme craze is the ultimate expression of the herd effect. Investors' investment behavior in this case often follows the trend, thereby pushing up asset prices. More speculators are brainwashed by the "myth of getting rich quickly" and enter the market, further pushing up asset prices, thereby making Meme assets bubble. Except for the moment when the bubble bursts, everyone involved is happy.
If we need to give a definition to Meme Coin, then from our research perspective, it may be:
• 1. Project tokens with no value capture/realizable products.
• 2. There is a huge community consensus.
• 3. Have strong cultural identity.
Meme Coin is usually a project token that lacks value capture or achievable products, however, it has a huge community consensus and strong cultural identity. This combination of characteristics has enabled Meme Coin to gain widespread participation in the market and has had a profound impact on the cryptocurrency community and ecosystem.
They are different from traditional blockchain project tokens, and their value is mainly based on market demand, investor psychology and community identity. Although they cannot provide substantial economic or technical applications, the unique attributes of Meme Coin have attracted a large number of investors and community participants. Community members have formed a consensus system through common interests, views and beliefs. This consensus is based on social media, online forums and other community communication channels, providing a strong driving force for Meme Coin. The participation and support of community members are crucial to the circulation and value development of Meme Coin. They are often closely linked to specific network culture, Internet memes or popular culture elements. This cultural identity makes Meme Coin an asset with emotional resonance and entertainment properties. By combining with user emotions and cultural resonance, Meme Coin has formed a unique attention in the market.
BTC is the largest Meme Coin
From this we can say: BTC is the largest Meme Coin.
BTC has no deflation, only halving of output, and no practical use, but is traded as a currency. However, since its birth in 2008, BTC has seen a huge increase, established a huge consensus, and has a large number of holders. BTC fundamentalism has become a BTC culture that is constantly challenged, and the resulting Crypto Native has gradually become the pursuit of the Crypto industry.
Although BTC has some similarities with some meme coins, such as lack of actual value capture and emphasis on community consensus and cultural identity, BTC's history, market position and social recognition make it a unique digital asset. Its value and influence far exceed those of ordinary meme coins, and it plays an important role in the entire cryptocurrency field.
Rebellion
Meme Coin brings cryptocurrency into wider popular culture in a light-hearted, playful way. It is a digital asset with entertainment and humorous elements.
The origin of Meme Coin is closely related to the spoof and entertainment elements in popular culture. Take DOGE, SHIB, PEPE and AI DOGE as examples. The rise of these projects shows the carnival of retail investors and the expression of group spirit. These projects attract users' attention and participation through emoticons and cultural symbols, thus becoming popular projects in the Meme Coin market.
The success of these projects is partly due to their use of popular emojis and cultural appeals as a means of communication, which quickly attracted the attention of investors, even many outside investors. These emojis and cultural symbols spread virally on social media, allowing these projects to rise rapidly in the Meme Coin market.
By using spoof and entertainment elements, these projects have successfully created an interesting and eye-catching identity, attracting a large number of investors and participants. Their creativity and uniqueness have injected new vitality into the Meme Coin market and demonstrated the huge influence of group spirit in Crypto.
The rebellion against the existing strong consensus will also be recognized and followed in the Crypto industry, because BTC itself is a rebellion against the real currency system. This may come from the patricide complex rooted in the hearts of Westerners, or the Oedipus complex. Therefore, Meme Coin can be said to be born out of rebellious culture, a rebellion against the mainstream, and a rebellion against the rebellious mainstream...
Just as, DOGE comes from the rebellious culture against BTC.
Billy Markus and Jackson Palmer believed that cryptocurrency was too serious, so they borrowed the photo of Japanese female Shiba Inu Kabosu and the technology of Litecoin to create Dogecoin, which is related to BTC, with unlimited total amount and extremely low unit price. Once it was launched, it was widely used and even used as a reward currency on websites such as Reddit.
SHIB is a rebellious culture against DOGE.
When "Ryoshi" created Shiba Inu, he promoted SHIB as a "dog killer" and wanted to imitate DOGE's Srypt mining algorithm to create a new Dogecoin on Ethereum. Unlike DOGE, which wants to be a payment currency, SHIB wants to build its own ecosystem and release a series of products, such as Shibaswap, SHIBOSHIS NFTs, SHIBA Eternity Game, SHIBA Metaverse, Shibarium Layer 2, etc.
PEPE is a rebellion against the Dog IP and the entire Meme Coin.
On the PEPE official website, we can see: "the most memeable memecoin in existence. The dogs have had their day, it's time for Pepe to take reign." PEPE advertises that it will overthrow all Inu and dogs, without pre-sales, burn taxes, own LP tokens and contract control. Subvert the current Meme and become the king of Meme. The reason why PEPE can do this is because the PEPE emoji package has a profound history and consensus: as early as the BTC era, the PEPE emoji package was circulated as an IP on the 4chan forum and recorded on the BTC ledger. "Rare Pepe" was launched as an NFT on the Counterparty trading platform of the BTC network in September 2016.
Attention Economy
But for a Meme Coin to truly become a Meme Coin, it needs to have enough and sustained attention.
Thousands of Meme Coin contracts are deployed every day. Only those that attract attention are called Meme Coins, otherwise they are all just scams.
It's not just Meme Coin. Under the current circumstances, the entire market is dominated by the attention economy.
When we count the once popular Meme Coins, we can find that the rise and fall of these projects reflects the carnival of retail investors and the expression of unique culture.
1. Most projects use airdrops and emojis to cold start and gain initial attention. For example, airdrops to users of popular projects gain initial attention (AI DOGE), or gain the attention of well-known emoji users (PEPE).
2. After having a certain number of early users, these projects used popular emojis and cultural IP as a communication carrier to spread virally on social media, quickly attracting the attention of investors, even many investors outside the circle, making these meme coins rise rapidly. Being mentioned by CCTV or KOLs such as Musk is the best way to spread and attract attention.
3. Meme Coin is mostly issued through Fairlaunch direct injection pool. Therefore, it can be increased by a small amount of funds, and use social media to eliminate zero and attract attention. Each doubling and elimination will further attract more users' attention, creating Fomo sentiment.
4. The continuous and persistent screen swiping, combined with the mythical stories of getting rich quickly by buying early and holding for a long time, breaks the circle and pushes user emotions to the extreme.
5. The entire development path uses listings on exchanges of different levels as milestones for project size, gaining the attention of different incremental users. Therefore, listing on Binance is often the short-term top of Meme Coin, which means entering the stock attention game. Whether the currency price can be kept stable in the end depends on the cultural acceptance and consensus strength of the project.
Emoticons as traffic carriers
As a traffic product, emoji culture spreads rapidly in the Internet era and resonates with users. As a tool for transmitting information and group emotions, emojis provide a basis for the spread of Meme Coin. Through the existing emoji IP, Meme Coin can spread rapidly on social media platforms, forming a viral market effect.
Emoticons are a collection of symbols that express emotions, expressions or meanings in the form of images or icons. They are often used on platforms such as social media, chat applications and online forums. Emoticons use cute, funny or exaggerated images to convey emotions and intentions in a concise and intuitive way, enhancing people's ability to express themselves in online communication.
The emoji culture has spread rapidly in the Internet era and has become a unique network language and popular culture phenomenon. Emojis are not only a tool for expressing emotions, they also have social and cultural significance. Emoji culture is a traffic product that accompanies the development of the Internet. As a carrier of information and emotions, it can quickly spread and arouse strong resonance among users. If the red envelope function of WeChat is the driving force for the iteration of traffic for WeChat, then emojis are the carriers of viral transmission among all Internet users. The existing emoji IP provides a certain basis for the dissemination of Meme Coin, and the subsequent viral transmission makes Meme Coin rise with the wind.
Musk: Meme Coin's largest market maker
As an important figure in the Meme Coin market, Musk has had a significant impact on the market value of related projects through his remarks and actions. Take his calls for projects such as DOGE, SHIB, and FLOKI as examples. These remarks have aroused investors' interest and follow-up buying behavior. In addition, some projects are even directly associated with Musk, attracting investors' attention by using his name or image.
According to the top ten meme coins in terms of market value collected by CoinGecko, the hype and explosion of at least seven projects are nominally related to Musk, and the market value of the top ten meme coins accounts for more than 88% of the total meme coin market value. During the Meme craze in 2021, he called out $DOGE, $SHIB, and $FLOKI and other MEME coins on Twitter. $LADYS also entered the hype period because Musk forwarded Milady's avatar. As for $ELON, although the official did not admit the relationship with Musk, the name of its token uses the name of Elon Mask. As for the popular projects $PEPE and $AI DOGE in the MEME craze in 23 years, the former claimed that investors should give up Meme Coins such as $DOGE, which can be understood as a technical reverse heat, while the latter obviously took advantage of the heat of $DOGE.
But at present, the marginal benefit of Musk's shouting seems to be getting smaller and smaller. According to research data released by Chain Catcher, the marginal benefit of Musk's "verbal market making" on the price increase of Doge is gradually decreasing.
The Meme Coin craze is the ultimate expression of the herd effect
Crypto is an industry that has been criticized since its birth, and practitioners are eager to be recognized. Cryptocurrency, as a complex financial product, has attracted a large number of investors without sufficient financial knowledge because of its lack of barriers, but the lack of standards has made these users victims of zero-sum games. Therefore, people usually gather in groups/DAOs, and are prone to blindly follow their own investors with strong subjective judgment. Therefore, this industry naturally tends to form groups and follow opinion leaders or celebrities.
In this case, most projects will try to find big names to cooperate with during promotion in order to demonstrate their product quality and be accepted by the large community. Meme Coin, as a project without fundamentals, relies more on mobilizing user emotions, so it needs to build a strong community and be recognized by big influencers. The premise for a Meme Coin to continue for a long time is also to build community consensus and spread its own culture in order to gain recognition.
In other words, the Meme craze is largely an extreme expression of the herd effect. Investors’ enthusiasm and buying behavior have driven up the asset price of Meme Coin, rather than fundamental analysis. This phenomenon often leads to the formation of price bubbles, making asset prices far higher than their intrinsic value. Investors’ synthetic consciousness and inner fear of missing out further drive up asset prices.
In the field of behavioral economics, the herd effect refers to the fact that individuals are influenced by the behavior of others when making decisions, which causes them to imitate or follow the behavior of others rather than making independent decisions based on their own information and judgment.
When it comes to investment, it is investors’ enthusiasm that drives asset prices, rather than fundamental analysis, which usually leads to price bubbles, with asset prices soaring to levels far above their intrinsic value. The continued rise in asset prices and the growing community discussion will stimulate more investment purchases, further pushing up asset prices.
To a large extent, investors who follow the trend have the mentality of "if you don't buy now, it will be too late". In this way, the collective synthetic consciousness of investors forms the basis for the positive feedback of assets.
In the recent meme market, according to data from Lookonchain, the myth of some "smart money" getting rich quickly has become a stimulus for other investors to buy. These investors buy because they are afraid of the investment illusion of "missing this market if they don't buy now", which further pushes up asset prices.
Therefore, it can be considered that the Meme craze is, to a certain extent, the ultimate expression of the herd effect, and it is also a practical proof of behavioral economics in Crypto Trading.
Capital drive
But in essence, gaining sustained attention and cultural recognition requires a lot of capital.
For example:
DOGE's explosive growth comes from Elon Musk's promotion: his own influence and the strong financial power behind him
PEPE's explosive power comes from the accumulation of PEPE emoticons over the years and the team's tens of millions of dollars in market making funds
Whether it is looking for KOLs to bring orders, community cooperation or listing on exchanges, financial support is required, and the increase in coin prices and the depth of liquidity require a large amount of continuous funds to back it up. For example, a simple forwarding promotion to a high-quality project introduction thread requires 100-1000u per person, and in order to ensure information coverage, such KOLs need to be found 10-20 people. For cross-scale community cooperation, it is also necessary to provide at least thousands of u worth of resources in exchange. The listing of the exchange requires paying tens of thousands or even hundreds of thousands of u as well as the listing fee and market maker fee of the project token. It takes hundreds of thousands of u to complete an ordinary project, not to mention a meme project that focuses on publicity.
In addition to repeatedly appearing on social media, strengthening cognition for multi-faceted and multi-target groups also requires a large amount of continuous funds to appear in the user's life circle for a long time and establish cultural identity. If you want to root a cognition or establish cultural identity in people's minds, you must repeatedly enter their life circle from different angles for a long time, just like a CryptoPunks that was given away for free at the beginning and no one wanted it, and then it was auctioned for a maximum of US$23.7 million, precisely because it built a Genesis NFT and crypto OG image in the user's mind. Owning it is not only Crypto Native, but also has the same status as heavyweights such as Shopify founder Tobi Lutk and Dallas Mavericks owner Mark Cuban. And achieving such cultural identity is inevitably related to Jason Abbruzzese's original article "This Ethereum-based project may change our understanding of digital art" and the continuous auctions of traditional art galleries.
Therefore, from the perspective of cultural identity and community building, Meme Coin and NFT have similar functions, and the establishment of IP in the real world seems to follow a similar path. For example, the Star Wars universe, the Disney universe, the Marvel universe, and the Harry Potter universe are all building their own cultural identity and community consensus. Use text stories and visual images to stimulate users, and repeatedly build a cultural system from multiple angles over a long period of time, and then expand peripheral businesses based on a stable user base.
Reference
[1]DOGECOIN official website https://dogecoin.com/zh-cn/#what-is-dogecoin
[2] SHIBA Official Website https://www.shibatoken.com/
[3] PEPE official website: https://www.pepe.vip/
