介绍
Memecoin has gone from being a speculative hype to being given a new connotation today. This is a shift in market investment logic and has also opened up a new economic form – community tokenization. In this wave, Memecoin Cults are also playing an important role as a manifestation of community user cohesion and loyalty. This article will start with Memecoin Cults (fanatics) and deeply analyze the reasons for the rise and popularity of the Memecoin track, as well as future development trends, to help ordinary investors better participate in this Memecoin feast.
“A believer is not just someone who worships God. When a person devotes himself wholeheartedly and passionately to a cause, a person, or even anything, he is a believer.”
Memecoin culture shines in the 加密货币 world in 2024. Countless arrogant investors who once disdained it gradually succumbed to its charm and began to cheer for it. In addition to convincing people with rising prices, Memecoins unique cultural atmosphere, viral marketing, and fair distribution model are all reasons for its popularity. Of course, Memecoin Cults (fanatics) are the key factor in Memecoins price performance.
This article will start with Memecoin “Cults” and deeply analyze the reasons for the rise and popularity of the Memecoin track, as well as future development trends, to help ordinary investors better participate in this Memecoin feast.
What are Memecoin “Cults”?
Looking back at the history of crypto development, although super Meme projects such as Dogecoin, 柴犬, Pepe, etc. appear in every bull market, its development scale and momentum are as hot as they are now, which still exceeds everyones expectations.
According to Coingecko data, the total market value of the Meme sector has reached 59 billion US dollars. Among the top 100 projects by market value, Meme projects occupy 9 seats. With the emergence of one-click coin issuance platforms such as Pump.fun, the number of Meme projects issued every day is in the thousands. More importantly, the price performance of the Meme sector has been far ahead of all tracks this year.
(Source: The Memecoin Supersycle @MustStopMurad)
With the increasing discussion and trading volume, Memecoin is no longer just a speculative target, but has become an important force that cannot be underestimated in the cryptocurrency market and the most active and enthusiastic position in the entire crypto world.
Memecoin “Cults” have played an indispensable role in promoting Memecoin to godhood. Memecoin “Cults” refers to the community or cultural phenomenon formed around a certain Memecoin. These communities have greatly promoted the popularity and price increase of Memecoin through collective action and the power of social media.
Murad, a newly promoted Meme KOL, believes that a strong community is like a fanatic and they are the key factor driving the price performance of Memecoin. In such a community, members loyalty and enthusiasm for tokens will lead to supply constraints, forming a diamond hand effect. Even if the price of tokens rises, community members will not easily sell them, because their sense of identity and belonging to the tokens make them more willing to hold them. One of the best ways to test the loyalty of a cult community is the drastic fluctuations in the market. Only after several sharp drops in token prices can the firmness and persistence of the community be proven, and firm holders will accelerate the rapid rise in Memecoin prices when demand comes.
Characteristics of Memecoin “Cults”
Compared with other project communities, Memecoin Cults consists of investors and supporters who are passionate about a certain Memecoin, and are often more active, loyal, vital and cohesive. They are passionate about the same Meme culture and actively interact and share on social media platforms such as Twitter, Reddit, and Telegram in an attempt to promote the spread and visibility of the token.
Based on its Meme background, the characteristics of Memecoin “Cults” include:
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Community Driven
Memecoin “Cults” are usually formed spontaneously by users and driven by the community. Community members discuss and make decisions collectively, and often carry out collective activities, such as joint purchases and organizing online activities, to further promote the exposure and acceptance of tokens.
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Sense of community
Memecoin Cults members usually have a strong sense of identity and community belonging. They work closely with each other to produce various memes, videos and other works that are easy to spread, and frequently promote the tokens they support on social media platforms.
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Investing passion and commitment
Memecoin Cults members are usually passionate about investment. They enthusiastically buy and hold tokens, believing that the power of the community can drive up the price of tokens and show extremely high return rate commitments to the public. Memecoin Cults firm believers are often vested interests. They have accumulated considerable returns by holding the token and encourage others to hold it for a long time.
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Leader worship
In this community atmosphere that is almost like religious fanaticism, leader worship is inevitable. Community members need leaders to provide them with a strong knowledge framework, emotional reinforcement, and belief support. If the leaders charisma is strong enough, a large number of followers will be generated, establishing a more powerful and closed cult community.
Building a token community is easy, but building a Memecoin “Cult” is not. This means that Memecoin “Cults” are more competitive because these communities can provide higher support and loyalty.
Analysis of the reasons for the popularity of Memecoin
Memecoin “Cults” culture is the inevitable product of the gradual climax of Memecoin worship. Understanding the emergence and development of Memecoin “Cults” is essentially exploring the reasons for the prevalence of Memecoin.
Memecoin is a type of cryptocurrency based on memes or pop culture elements. They lack clear technical innovation and are not designed to provide practical functions. Because of this, Memecoin is often seen as a symbol of speculation, and even if the increase leads all sectors, it is generally considered a false prosperity.
Interestingly, as Memecoin has grown in size, its identity has also changed dramatically. Memecoin is no longer just a tool for speculation, but also represents a new economic form – a tokenized community.
So, what are the factors driving the popularity of Memecoin?
Wealth Effect
The reality is that more than 90% of crypto users come to speculate and make money. Therefore, in each cycle, the market will continue to emerge with various narrative innovations and sector rotations, such as decentralized finance DeFi, GameFi, NFT, DEX, DePIN, Restaking, L1/L2, etc. However, when the market is in a state of narrative weakness and funds are unsustainable, differentiation begins.
Data shows that Memecoin is the best performing sector so far this year, and its wealth effect is much higher than mainstream coins, new coins, VC institutional coins, etc. To some extent, for coin holders who let their heads run wild, although Memecoin is also a lottery game, as long as you hit it once, you can bring very considerable returns. And under the short-term speculative psychology, the market is prone to FOMO phenomenon.
(Source: Dune Analytics @cryptokoryo_research)
This gambling-like nature of the game also constantly stimulates the secretion of dopamine in the brain. Dopamine is a neurotransmitter in the brain. When people receive internal and external stimuli, the reward system in the brain is activated, producing pleasure, satisfaction and happiness. As external stimuli continue to increase, dopamine levels will also increase chronically, leading to addiction. If the price of Memecoin plummets, dopamine levels will drop, which may cause anxiety, tension and depression. Frequent fluctuations in dopamine for a long time will also have a long-term impact on the brains reward system, thereby changing users risk preferences and investment styles.
Changes in market investment logic
Crypto investors choose to actively embrace Memecoin. In addition to the money-making effect of this sector, it essentially creates a crisis of confidence in utility tokens and the VC value system.
Looking at the history of decentralized technology development, although there are very few products that can truly support practical application scenarios in the process of more than ten years, market funds are still paying for their trial and error. Unfortunately, the current market narrative is weak, lacking technological innovation, and most projects are keen to reinvent the wheel. When demand is repeatedly falsified, the investment logic of the market will naturally change.
As for the VC projects that were once highly praised, crypto users have gradually completed the demystification in the market education again and again. The most criticized point of institutional coins by the community is their high valuation FDV and low initial circulation supply. This market structure has greatly squeezed the rising space of the secondary market. Most star projects have extremely high opening prices, which are dozens of times that of private placement rounds. This price is difficult to obtain sustained buying support. Investors in the secondary market often buy and stand guard, and then face continuous token unlocking. The huge selling pressure is enough to discourage investors. According to the 代币 Unlocks report, it is estimated that about $155 billion worth of tokens will be unlocked from 2024 to 2030.
In this regard, Omid Malekan, a professor at Columbia Business School and a blockchain writer, once said, Memecoin itself is a form of economic populism. They are a rebellion against the token economics supported by venture capital.
KOL, institutions and capital create momentum
The market is always right.
Driven by profit, Memecoin has also been favored by more and more celebrities, KOLs, institutions and top exchanges. For example, Elon Musk has repeatedly called for orders for Memecoins such as Dogecoin; the rise of Meme KOLs such as Ansem and Murad; and institutions such as Wintermute and Jump Trading have rushed into the market and hoarded a large number of tokens.
In particular, top exchanges have also opened their arms to Memecoin and launched multiple projects in succession, which not only greatly improved the liquidity and market influence of tokens, but also broadened the potential audience of Memecoin.
Fair distribution mechanism and social media communication
Back to Memecoins own characteristics, its Fair Launch fair distribution mechanism is the best interpretation of decentralization. Zero pre-mining, zero private placement, and 100% full circulation eliminate the inherent advantages of early investors and team members before the token is issued, reduce the possibility of insider manipulation, and provide fair opportunities for all participating users. In addition, Memecoin, with its vivid humorous expression and low threshold for participation, can easily rely on social media and community promotion to gain popularity through viral transmission.
Improvement of supporting infrastructure
As Memecoin becomes a new benchmark for the entire crypto market, related supporting tools and services are also gradually becoming more complete.
For example, trading analysis tools such as GMGN, DEX工具s, and DexScreener provide users with more detailed project data analysis for participating in Memecoin. One-click coin issuance platforms such as Pump.fun have greatly reduced the issuance threshold and cost for users, providing users with more choices in terms of flexibility and diversity.
How can ordinary investors participate in Memecoin?
Memecoins cultural narrative gives it a strong vitality. It does bring some novel experiences and greater imagination space, but as a crypto investor, you still need to participate with caution, and it is even recommended not to participate.
The Memecoin market is still subject to Ponzi schemes and has a strong survivor bias, with the vast majority of users leaving the market with a loss of principal. If you don’t have an effective trading system of your own, then the best investment strategy is to simply not touch it.
At present, there are generally two types of investment strategies for Memecoin in the market:
Prefer diamond hands
This investment strategy focuses on casting a wide net and making a small investment for a big gain. Investors buy a small amount of tokens at an early stage and sell them at a high point. Although most Memecoins will return to zero within a day or two, once you buy a lottery ticket, you will get a return of dozens or even hundreds of times your investment.
However, when choosing early-stage projects, users should also try to do due diligence, focusing on project contracts, position information, on-chain funding pools and other information to avoid Rug Pull scams such as Pixiu.
Preference is relatively stable
Memecoin KOL Murads trading style is mainly stable. He prefers to look for relatively mature tokens and reduce the frequency of transactions. Murads coin selection criteria are as follows:
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Focus on mid-cap coins with a market cap between $5 million and $200 million;
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Prefer Solana and Ethereum, excluding Base, Ton, and Sui, because the first two have wealth spillover effects;
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The project has been online for at least six months;
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The project has experienced at least two 70% plunges.
Ultimately, Memecoin is a game of attention. Once the traffic declines and cools down, it is basically close to being declared dead. Therefore, coin holders should always pay attention to changes in on-chain liquidity and community dynamics. If the on-chain pool is too small, then even if you make a profit, it will be difficult to sell at the market price, and the slippage will be too large.
Memecoin Future Exhibition
With the continued popularity of Memecoin, it is foreseeable that more funds and traffic will flow in. The following trends may emerge in this track:
First of all, for major project owners and public chains, Memecoin is an excellent testing ground for attracting users and funds. They will continue to establish Meme-based foundations and incentive programs to support the development of Memecoin projects within the ecosystem.
Secondly, the infrastructure based on the Memecoin ecosystem will be further developed and improved. In addition to the current transaction analysis tools and token issuance platform, there will be more innovative products and services that are more professional and vertical in terms of gameplay.
In addition, for the Memecoin project itself, technological innovations may be introduced, or it may turn to more practical applications, such as providing actual services or products to achieve more empowerment.
Ethereum co-founder Vitalik Buterin published an article about Memecoin at the end of March this year. He believes that while Memecoin distributes value fairly, it can also try to create more positive and lasting social value, such as contributing to public causes such as charity and environmental protection.
Finally, the huge volatility and speculation of Memecoin also bring more challenges to regulation. In order to protect the interests of investors, more protection measures may be introduced to prevent fraud, scams and misconduct and enhance the overall trust of the market.
结论
As an investor, the first principle in the crypto market is to keep an open mind. Memecoin has gone from being a speculative investment to being given a new meaning today. This is a shift in market investment logic and has also opened up a new economic form – community tokenization.
In this wave, Memecoin Cults is also playing an important role as a manifestation of community user cohesion and loyalty. We must examine and tolerate these innovative forces and trends with an objective attitude, but at the same time we must also face up to the chaos, disorder and scams in the Memecoin market.
Memecoin may keep your dopamine up, or it may make your wallet go to zero overnight. As a crypto investor, please invest in any project carefully according to your risk tolerance, keep a clear head, and always pay attention to market dynamics and potential risks.
参考
[ 1 ] https://x.com/hmalviya9/status/1847536478274097444
[2] https://x.com/MustStopMurad/status/1839732601759641960
[3] https://foresightnews.pro/article/detail/69410
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风险警告：
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The Memecoin market is full of uncertainty. Its price is greatly affected by factors such as community sentiment and market speculation, and may fluctuate greatly in a short period of time. Due to the lack of supervision and technical support for Memecoin, investors need to be more cautious.
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The author of the article does not intend to provide legal, financial, investment or any other form of professional advice through the article. This article is for informational and educational purposes only. The information provided by the author is based on the authors research and analysis and is intended to contribute to academic discussion and understanding in the relevant field. In addition, the publication of this article does not constitute a solicitation of business or an invitation to establish any professional relationship.
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MemeBox is a new brand under Gate.io dedicated to the prosperity of the MEME ecosystem. It will deeply explore the potential and opportunities of the Meme market. MemeBox is committed to perfectly integrating technology and culture, gathering Meme culture enthusiasts from all over the world with an open and inclusive attitude, and jointly promoting a new trend of Meme culture!
This article is sourced from the internet: Behind the Memecoin “Cults” craze: Dopamine, economy and consensus
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