Understanding Valuation Logic Behind Meme Coins Through Issuance of Official $TRUMP (Part 2)
By Zhu Weisha | January 24, 2025
In the previous article, "Understanding Valuation Logic Behind Meme Coins Through Issuance of Official $TRUMP (Part 1)," it was pointed out that if the $TRUMP team does not take further action and relies solely on President Trump's personal brand and a one-page whitepaper, its price may not break through the previous high and may even face a continuous decline. This is the rule of meme coins. Entrepreneurs win by not playing by the rules, and $TRUMP will only rise if there is a new model. What is Trump's new model? Let's guess.
I. What did President Trump see?
Trump has a listed media company, Trump Media & Technology Group (DJT), holding 56% of the shares. This company, also known as Truth Social, was initially established to address the issue of media blocking President Trump's voice. Given the maturity of today's social media, Truth Social is unlikely to stand out in this field. Today, Truth Social is valued at $7.3 billion, and $TRUMP's circulating market cap is $6.6 billion, with little difference between the two. Truth Social's cash flow is negative, while $TRUMP's cash flow from selling tokens is positive.
Trump has tried selling Trump shoes and NFTs, earning tens of millions in the crypto field. The crypto market is clearly easier to navigate than the mature internet social media market. He has a direct sense of the difficulties of internet media and the ease of the crypto field.
It is said that Truth Social has 4 million users, which is an insignificant number in internet media. However, if they become $TRUMP users, nearly 5 million real customers can support a market value of $50 billion for $TRUMP. These are two different valuation systems, with a price difference.
Truth Social's historical mission is complete, and its market value is overestimated. Only mergers and acquisitions are the shortcut for it to grow further. Acquiring TikTok is certainly a feasible path, and even taking a stake is enough to turn Truth Social around. The inauguration ceremony invited TikTok's Shou Zi Chew, while the other invitees were all world-class tech titans from the US, with Shou Zi Chew being the only professional manager. This is unusual. What does it mean? We also saw that Trump delayed the Supreme Court's ruling on TikTok by 75 days, and on the 17th, the $TRUMP issuance statement mentioned that 80% of the tokens would be locked for three months before being released. Both are around three months, such a coincidence?
Trump banned TikTok during his first term, so why allow it now? Because he now has Truth Social. Looking at it together, a reasonable explanation emerges: a good acquisition opportunity has appeared, allowing Truth Social to participate in the acquisition. Such an idea is something ordinary people can think of, not a grand move. If President Trump does this, it would be a bit demeaning, not fitting for the chosen one. It must not be like this; President Trump's plan must be more brilliant, otherwise, it wouldn't be Trump!
On January 17, 2025, $TRUMP suddenly emerged, shaking the world. This fits President Trump's personality, with an incomprehensible idea. The issuance of $TRUMP seemed rushed. Why issue it during China's time zone when Americans are sleeping? Because of the fear that it wouldn't sell out, the price wouldn't rise high, and there would be no sensational effect. With sensational effect comes attention, and another big market move can be launched at any time. Trump believes the issuance was very successful. Indeed, well done! Patting the thigh, one can guess, who is the mastermind behind this?
Looking at all these things together, $TRUMP is the most important link in the entire event. Three months later, when the tokens are released, who will buy them? The value of President Trump's intangible assets cashed out at one time may be several times the family assets. He has seized the extremely overvalued crypto market.
So, the remaining task is to tell the story of $TRUMP well. Tell a story of the new era replacing the old era, a story with enough imagination. Of course, it must be something everyone hasn't heard before, new and reasonable. No need to think, we all know what he wants to say.
II. President Trump Who Takes the Road Less Traveled
Focus on community
In the series of articles "What is the Internet Era," a viewpoint is presented: Over the past thousand years, the major eras can be divided into the Agricultural Era, the Industrial Era, and the Internet Era. The characteristic of the Agricultural Era was that whoever had more land had the advantage; in the Industrial Era, whoever had more capital had the advantage; and in the Internet Era, whoever has more people has the advantage.
The advantage of the Internet is reflected in communities. The world's largest community is Facebook, claiming to be a community of 3 billion users. Of course, its community has not solved the question posed by Kevin Kelly in the Web1 era. Kevin Kelly's point is that in the Internet Era, the problem of customers being both user and contributors needs to be solved. Even such a "half-disabled" community is still powerful, with giants sweeping through and leaving no grass behind.
The Internet has reached Web3, which is different. A community called the crypto community has emerged, with cryptocurrency as the link. The crypto community is not simply an interest community, nor is it a residential community, nor a religious community. Their difference lies in the different links of the community. The crypto community is linked by cryptocurrency, centered on narratives, and believes in the rise of crypto prices. With the link of cryptocurrency, employees, contributors, and users are integrated, naturally solving Kevin Kelly's question. The most powerful thing is that customers have cryptocurrency, giving them financial attributes, and with the characteristics of encryption, the valuation goes through the roof.
In the long run, meme coins have the worst valuation in cryptocurrencies and cannot be compared to cryptocurrency projects with clear and profitable business models. Even so, the valuation of Dogecoin is much higher than that of the centralized exchange Binance. Dogecoin is Web3, while Binance is not. Where is the logic in this? This is reality. Such a good opportunity will naturally be utilized by those with awareness.
The emergence of meme coins is a product of the exploration of crypto communities. Measuring the value of communities with meme coins has just begun. We have not yet found the correct measurement method, narrative method, and direct means of monetization. Due to the early stage, pricing is inaccurate, and market pricing premiums are very normal. Of course, price corrections are also very rapid.
The issuance of $TRUMP is an exploration of the future by a shrewd entrepreneur and politician. Amidst public criticism, he may stand taller and be misunderstood. He is looking for the correct way to monetize intangible assets through the community.
The Internet Era has added the organizational form of the community, which has the genes of a company and the egalitarian characteristics of the Internet. It is transparent, equal, fast, and inclusive. Different communities have different businesses, but the organizational structure is similar. The structure, system, and laws of companies have stabilized after hundreds of years of exploration by humans. The exploration of the structure of Internet communities has just begun. Cryptocurrencies are the pioneers of this practice. It is difficult to price in the early stages, and chaos is inevitable.
The following two points are important principles:
1. Cryptocurrencies can only be monetized by building good communities.
2. Community systems based on community autonomy are more suitable for the egalitarian characteristics of the Internet and are used to solve the contradiction of customers being both users and contributors in the Internet Era.
Feasibility of establishing the Trump community using $TRUMP as a link
Firstly, the issuance of $TRUMP shows that the Trump team understands the cutting-edge developments in cryptocurrencies.
Secondly, Trump's Truth Social is a social software, not much different from community software. With slight modifications, it can become community software, but it is unknown whether their social team has Web3 genes. The difference between community software and social software is just in their use, which can be distinguished by Kevin Kelly.
Thirdly, even without modifying the Truth Social software, directly using our general community software, Simi, all the functions needed by the Trump community are available. The functions described below are those we have already implemented, are implementing, or to be implemented. For the theory of communities, refer to Chapter 3 "Community and Indirect Incentives" of the White Paper on the Chainless System and the series of articles on the similarities and differences between companies and crypto communities. $TRUMP and the community do not need a chain, and it is also chainless. “Chainless” means solving real-world problems with Web3 thinking without the need for blockchain. The community is a typical application that does not require a chain.
Fourthly, if airdrops are made to TikTok and Truth Social users, it may generate 100 million to 200 million customers within a year, and $TRUMP will disrupt the current rules of the crypto market. Airdrops can be based on a standard of $50 per person, locked and released linearly. For the algorithm of airdrops, refer to Chapter 2 "Incentives" of the White Paper on the Chainless System.
Fifthly, by explaining the project idea, people can be quickly gathered. The characteristic of cryptocurrencies is early token circulation, which means that for $TRUMP to rise, it must rely on the expansion of community traffic and multiple monetization applications. Applications, even if they are stories, are fine as long as they are reasonable.
$TRUMP is the token of the Trump community
$TRUMP is now a commodity, representing only the intangible assets of President Trump and having no other value. As an early-stage community, it is not profitable, and the token is equivalent to a membership, with no current legal obstacles. However, once the Trump community gathers a certain number of people, it will definitely be profitable, just like a company's profitability. In the future, the community will need clear legal definitions, which will require the Trump government team to formulate.
The Trump community is his direct link to the people
To broadly connect with the people, the community entry standard must be low, let’s say remaining at $50. This means that holders with less than $50 cannot enter the community. The issuance of tokens must have rules and be automatically issued by machines. Chapter 2 of the Chainless White Paper invented a universal POP algorithm based on headcount.
As a president, Trump pioneered governing through Twitter. The Trump community has President Trump, which is a huge advantage that other communities do not have. The community allows President Trump to communicate with community members. Artificial intelligence can enhance President Trump's processing capabilities. Members can have equal conversations with the president, which was unimaginable in the industrial era. This process is within the current capabilities of artificial intelligence and is only possible in the internet era. In the internet era, entrepreneurs like Musk and Lei Jun are on the front lines facing users, understanding the essence of the internet. Shouldn't officials learn from entrepreneurs?
The pyramid-shaped management suitable for the industrial era should be weakened or abolished because the future is dominated by the internet era. The issuance of $TRUMPs is President Trump's layout for the future. President Trump will pioneer again—governing through the community. All bureaucrats will be under pressure, and decentralization has finally reached them. As the saying goes: the community is vigorous, and the giants sweep through without leaving a blade of grass.
The Trump community is not a news community
News is more of a public domain, and X and Truth Social Media are products suitable for the public domain. X created a community but designed it poorly, with no obvious diversion to the private domain because Musk, despite his intuition, does not understand community principles. The Trump community does not need news; it needs to face the market directly to solve problems, with more discussions. Such a community needs management. Community management requires a core team, which can refer to the similarities and differences between companies and crypto communities.
The Trump community is a combination of public and private domains. It handles non-relationships, one-way relationships, one-time relationships, weak relationships (light relationships), acquaintance relationships, and friend relationships. The public domain handles non-relationships, one-way relationships, and one-time relationships. This is no different from X. Weak relationships and acquaintance relationships are the main themes handled by the Trump community. Blogs in the Trump community can be viewed freely, but entering community groups requires tokens as a link. Relationships are the underlying concept of the community. For related discussions, refer to the article "Internet Concepts: Relationships, Nodes, Kinetics, Potential Energy, Network Relationships" on the Chainless website.
The design of hearings in Trump's executive order on cryptocurrencies is good. Discussions should first take place in the community, and representatives for high-level meetings should be elected through the community. With the existence of the community, Musk's Department of Government Efficiency operations have a better grasp, as he made good use of X, although X is not yet a community product. The community allows people to delegate and supervise in real-time.
Community needs a soul
A community without a soul cannot function. President Trump must be the soul of the community. The Bitcoin community (Bitcoin Forum) declined after Satoshi Nakamoto left because it lost its soul. The correct approach is for Trump to be the soul in the early stages, and during the community governance stage, the core team replaces the soul figure, becoming the soul of the community, achieving the switch from centralization to decentralization. The decline of the Bitcoin community was due to the inability to complete this switch. Without a core team to replace Satoshi Nakamoto, the community lost its value. Fortunately, the Bitcoin Forum did not issue tokens, but the Trump community is different because it has issued tokens. The governance of the community can also refer to Chapters 3 and 4 of the Chainless White Paper.
Core team needs checks and balances
In companies, shareholders' meetings and boards of directors check and balance the management team. This balance has been institutionalized through hundreds of years of effort. The scientific nature of this is worth referencing. The difference is that companies do not have the transparency and fairness brought by cryptocurrencies. This idea has been deeply rooted in the American mind because the autonomy of the Bitcoin community has set an example. Its system operates automatically without supervision. Transparent ledgers and fair algorithms play a decisive role.
Another secret is the mutual checks and balances between the computing power side and the program side. After Ethereum destroyed this balance, the coin price never reached a new high. The Trump community holds many tokens, and besides designing transparency and fairness, it must design this balance of power.
Trump's governance is measured in real-time
Stock prices measure the value of enterprises in real-time, and $TRUMP measures President Trump's governance in real-time. On January 25, 2025, $TRUMP fell to $5.6 billion in circulating market cap, ranking down three places, lower than Pepe coin, becoming the fourth meme coin. It is also lower than Truth Social Media's $7.3 billion. The market trend aligns with my previous article's analysis of the valuation logic behind meme coins from the issuance of $TRUMP. The reason is that the market does not see my above speculation, and this speculation cannot be verified. If my speculation is correct, $TRUMP will soar. Comparatively, President Trump's intangible assets are certainly greater than Pepe's. On the other hand, from the valuation of Truth Social Media, $TRUMP is also undervalued. The current token trend is an emotional outburst of misunderstanding Trump's token issuance. Real-time measurement of governance puts pressure on personal token issuance, as one's worth is evaluated by the market rather than professional assessment. Polymarket's predictions are fast and accurate, a Web3 project that has decimated traditional survey companies. Community governance has the same effect.
Trump community needs profit model for long-term existence
If $TRUMP is profitable, those without a business model, like Dogecoin, will be the first to suffer. Different communities have different models, and communities without a profit model will not last long. Because the community is not a one-time relationship, active users need to work, and profitability can be incorporated into the existing financial valuation system, easily gaining recognition from mainstream financial institutions.
President Trump's intangible assets are indivisible. $TRUMP represents the value of Trump's intangible assets through the community, but intangible assets do not have the computing power base like Bitcoin, only the expected valuation like Dogecoin. The expectation is that with Musk's support, Dogecoin will have practical value. The market's expectation for Dogecoin is getting lower because Dogecoin has no ability to break through the previous high. Chapter 3 of the Chainless White Paper introduces the profit model of the Chainless community: financial e-commerce. The wool comes from the pig, and if no other model is found, $TRUMP can adopt it.
The power of the community
The community is a volunteer organization without expenses, and the crypto community is linked by tokens, centered on narratives, and believes in rising token prices. If operated well, the cost is extremely low. If the community can allow members to profit besides speculation and receive help in difficult times, with continuous token appreciation, the power of this community is enormous. Each election costs tens of billions, which can be invested in community projects to ensure token appreciation. When there are 200 million Americans in the Trump community, no matter who they vote for, they will win. The community will completely change the political ecology. At this point, opponents have no choice but to follow. The old election methods will be eliminated. We cannot view President Trump with outdated knowledge and experience. As the saying goes: the community is vigorous, and the giants sweep through without leaving a blade of grass.
I don't know if America will be great again. An organized community may make Trump invincible, and Trump will certainly be great again!
Postscript
The internet era has transformed the production relationships of the industrial era through communities, which cannot be explained in just a few words. The Chainless website has published over 800,000 words of various articles on this topic. These articles provide a theoretical summary of the current state of cryptocurrencies, which only have practical applications but lack systematic theory. This is just one perspective, and interested readers can visit the website to read more. This article speculates on President Trump's behavior based on community theory. If any part of it happens to be accurate, it is purely coincidental. Just like my suggestion over two years ago to solve the US debt problem with Bitcoin, it was also purely coincidental.
Original link
#Trump #Meme @DW20 @songht @zhuweisha2
