In-Depth Analysis of Memecoin: From Mockery to 100 Billion Market Capitalization

TL;DR

1. With the results of the US elections announced and Bitcoin surpassing $100,000, Meme coins usher in a summer market.

2. Memecoin was not originally focused on speculation; the birth of DOGE embodies the original intention of the Meme: straightforwardness, humor, and grassroots spirit, while also contributing to charitable causes.

3. A new trend is that Memecoins are gradually becoming a vehicle for expressing support and faith.

4. Currently, as the infrastructure continues to improve, Memecoin is experiencing a surge in numbers while also exhibiting a new duality.

5. Memecoin is a complex investment that requires a comprehensive consideration of narrative, community, marketing, risk, market performance, and smart money.

Introduction

An animal image, an emoji, an icon; although memes are everywhere in the internet age, turning pop culture into currency and assets, and driving hundredfold, thousandfold, or even ten-thousandfold increases, is a unique landscape of Web3. In this year when Bitcoin hit a new high of $100,000, Memecoins have sparked a symbol frenzy in the crypto market.

According to data, Memecoin has performed exceptionally well from the beginning of 2024 to now, with the index rising from 1.2% at the start of the year to a maximum of 372.9%, significantly outpacing other crypto sectors; at the same time, the total market capitalization of Memecoin has increased from tens of billions at the beginning of the year to over 139 billion, with the number of Memecoins with a market capitalization exceeding 1 billion rising to 10, and the growth rate of leading projects seems limitless. PNUT, which was issued in November 2024, reached a market capitalization of 1 billion in just 11 days.

The public chain ecosystem has also changed due to Memecoins. Data shows that from January to November 2024, Solana and Base have become the two public chains with the highest investor interest, both benefiting from the explosion of the Memecoin ecosystem. Base, in particular, has emerged as a new star in Layer 2 thanks to its Meme characteristics, with active addresses increasing 20-fold compared to the beginning of the year, leading other L2 projects in several metrics.

Nevertheless, the controversy surrounding Memecoin has never ceased. It seems to represent two extremes of the Web3 world: on one hand, a simple yet highly attractive narrative of wealth and the rebellious spirit of crypto culture; on the other hand, it reinforces external stereotypes about the uselessness of technology and the bubble of funds.

This article will outline the development stages of Memecoin and attempt to deconstruct its duality.

Part.1 Development Stages of Memecoins

Memecoin is the tokenization of internet memes or other humorous events and concepts. They are native assets of the blockchain, transferable, usable in blockchain applications, and can also be traded on secondary markets. Looking back at the development of Memecoins, the pace of hot project updates is extremely fast, with evolution in quantity, themes, and on-chain layouts, which can be divided into three stages:

Phase 1: Black humor represented by DOGE

The discussion of Meme cannot be separated from the earliest and currently the highest market capitalization Memecoin - DOGE, which has established the cultural foundation of Memecoin: straightforwardness, humor, and grassroots.

In 2013, Adobe marketer Jackson Palmer and IBM software engineer Billy Markus created DOGE for fun by combining the then-popular Shiba Inu meme with cryptocurrency. Unlike other projects, Dogecoin did not rely on grand visions or technological breakthroughs to attract attention; instead, it was frank and genuine: to become the most fun token in the world. This declaration went viral on Reddit, and its tipping bot also became an early means of dissemination.

Elon Musk's support has made Dogecoin famous. In 2021, he mentioned Dogecoin multiple times, making it the best-performing asset of the year and deeply associating with it. Since then, whenever Musk tweets, the price of Dogecoin tends to rise.

When the early Memecoin track was not yet formed, most projects aligned themselves with DOGE, and the common point is:

1. The theme is animals, mostly dogs and cats.

2. Charity is the original intention. DOGE sponsored dozens of charitable events in its first two years; SHIB also donated 10% of its supply to the India COVID Relief Fund upon its creation.

3. Abandon jargon, focus on dark humor, and rely on community dissemination.

4. Primarily issued on Ethereum.

Phase 2: The Expression Carrier of Web3 Culture

The second stage of Memecoins has a wider variety, expanding from animal coins to celebrity coins, political coins, emoji coins, and more. A new trend is that Memecoins are gradually becoming a vehicle for expressing support and belief, whether for a certain spirit or an iconic figure.

At the same time, Solana has become a major stronghold for Memecoins due to its high throughput and low gas fees.

Spiritual Memecoin

BONK was launched on Solana at the end of 2022 after the collapse of FTX, aiming to revitalize the Solana ecosystem. It has indeed worked, as besides the significant price increase, BONK has integrated into the Solana ecosystem, including DEX, wallets, and gamified applications.

BOME was created on Solana in March 2024, with the founders hoping to use decentralized storage to preserve Meme culture on the blockchain, exploring the intersection of Meme culture, blockchain technology, and DeFi.

Iconic figure Memecoin

During the 2024 U.S. presidential election, Memecoins themed around political figures have emerged. In particular, multiple versions themed around Trump, such as TRUMP and MAGA, are actively performing in the market by leveraging the heat of political events and social media controversies. Memecoins inspired by Vice President Harris, such as KAMA and MAWA, have also appeared.

As of the time of publication, 83 types of political coins have been launched, with a total market capitalization of $500 million. These types of Memecoins attract specific groups through thematic figures and are increasingly viewed as vehicles to support political movements, crowdfunding, and attract voters.

Other representative figures include retail investor Roaring Kitty from the US stock market and crypto KOL Murad. The former is known for leading the "retail battle against Wall Street," with the related Memecoin KITTY and GME surging due to his tweets; the latter gained popularity through his speech videos, with all recommended Memecoins rising.

Phase Three: New Forms of Memecoins

With the increase in market capitalization of Memecoins and the emergence of token launch platforms like Pump.fun, Memecoins have seen an explosive growth in quantity while presenting two trends: one is an extremely depressed market, and the other attempts to combine with new narratives to provide application value.

The chaotic Memecoin market

Pump.fun allows anyone to generate tokens on Solana with a very low issuance cost of only 2 USD (, thanks to ). Once generated, they can be traded on the internal market, and after reaching a market capitalization of about 69k USD, they will be automatically deployed to Raydium; if they perform well in DEX, they are expected to be listed on centralized exchanges.

The pump directly led to a surge in the number of Memecoins, with the total number of deployed tokens exceeding 4 million. However, a large number of malicious scams and contract vulnerabilities also emerged, and the vast majority ultimately went to zero, with only a very few able to enter DEX and CEX.

Nevertheless, major public chain ecosystems have been mimicking each other, such as TRON's SunPump, BSC's Four.Meme, Base's Virtuals, and Clanker, all of which have provided fertile ground for the explosion of Memecoins.

Memecoin + Application

With the proliferation of Memecoins and the exhaustion of innovation, the market realizes the need for new narratives. "Application-based Memecoin" has emerged, and the introduction of AI injects new vitality into it.

Some Memecoins are starting to develop applications, such as DEGEN on the Base chain, which has developed the L3 Degen Chain, realizing the transition from community tokens to those with actual value. Floki also started as a Memecoin and later transformed into a practical project with a large ecosystem, venturing into areas such as NFT, DeFi, and RWA.

On the other hand, some applications have also started issuing Memecoins, such as LUM, issued in collaboration with AI Agent aethernet and clanker, as well as GOAT, a creative concept by AI Bot "Terminal of Truth".

Part.2 The Dual Nature of Memecoins

Looking back at the development of Memecoin, it's hard to imagine that a joke coin could flourish so much in nearly 10 years and be officially accepted as a choice of cryptocurrency asset. Behind this transformation, we can't help but ponder: what ignited the enthusiasm for Memecoin? And how should we view the dark side of Memecoin?

Anti-seriousness, Dissolving Authority VS Technological Nihilism

Essentially, Memecoin is the monetization of deconstructionism, creating unique and charming Meme images and stories through creative adaptations of popular culture and humorous satire: dissolving authority, absurdity, and anti-seriousness, while attracting investors to participate through market frenzy.

The Memecoin craze in 2024 will dissolve the authoritative goal from Web2 to Web3 and materialize.

The blue-chip VC Tokens from the last bull market cycle have lost their appeal, and retail investors' opportunities to purchase pre-issued tokens are approaching zero. The high FDV and low circulation have led to a situation where valuations are inverted as the norm. Retail investors urgently need a redistribution of rights and wealth, and the explosion of Memecoins is seen as a rebellion against VC, where there is no manipulation by big players and all participants have equal opportunities.

However, as Memecoins become mainstream, it also raises concerns about Web3 falling into technological nihilism. Will the failure of the technological narrative weaken the drive for innovation? In addition, while Memecoins undermine the authority of the manipulators, they crown the authority of KOLs; does this also weaken the image of the behind-the-scenes groups?

Low cost high return VS capital bubble

The enthusiasm for Memecoins largely stems from the narrative of quickly doubling wealth. The biggest attraction is becoming the next protagonist of a rags-to-riches story at the lowest cost, like a new type of crypto lottery, seizing opportunities in a bull market with abundant funds.

But the reality is that 97% of Memecoins have vanished, with an average lifespan of only 1 year. More than half are considered malicious projects, and nearly one-third of investors have suffered losses due to scams.

Attention Economy VS Chaos and Ephemerality

Memecoin is essentially based on attention, and its components include:

1. Symbolic communication: Internet memes, animal images, etc. are labor-saving media that easily establish connections with the audience. The live streaming feature of Pump.fun is the maximization of attention economy.

2. Community-driven dissemination: Decentralized communication methods are efficient and have strong penetration, such as Reddit, 4chan, Twitter, Telegram, etc.

However, attention is extremely unstable, and the rapid shift of market focus means that the value of Memecoins may collapse in an instant. Some Memecoins, such as political coins, have a time-sensitive nature, and their popularity quickly fades after the event ends.

When speculation knows no bounds and people resort to any means to attract attention, the bottom line can become blurred or even disappear. The forced closure of Pump.fun after instances of self-harm, animal abuse, and even Nazi performances during the live broadcast was predictable, as was the short-lived nature of the related Memecoins.

Part.3 How to Identify Quality Memecoins or Junk Coins?

Despite the short lifespan and high failure rate of most Memecoins, the potential for quick profits still attracts a large number of investors. A thorough investigation is especially important. Here are some reference factors:

1. Narrative

• Need a supportive narrative with viral spread, such as news events, political themes, engaging stories, or iconic figures.
• When the old narrative is saturated, assess whether the new narrative has enough humor or irony, and whether it can lead the trend.

2. Community

• Check the real activity level of the team on social platforms such as Twitter, Telegram, Reddit, Discord, etc.
• Assess the community's potential. KOL murad proposed the concept of "cult Meme", emphasizing that the ultimate form of Meme is the next religion, and it is necessary to observe the cult atmosphere, passion, and sense of religion within the community.

3. Marketing

• Marketing capability is reflected in the strength of KOL matrix promotion, Twitter discussion trends, Telegram dissemination frequency, etc., which can be queried through relevant tools.
• Celebrity Effect: If there is involvement from Vitalik, Musk, and leading KOLs, the potential for dissemination is greater, but one should not blindly follow KOL endorsements.

4. Risk Audit

• Check if the LP tokens have been burned to prevent the developers from withdrawing liquidity.
• Check whether the developer has relinquished ownership of the smart contract to reduce the risk of malicious changes.

5. Market performance