Meme coin's value consensus mechanism, future trends and investment logic
By Billy Wen, Partner at Negentropy Capital
I first bought meme coins in 2015 because the Internet company held an annual meeting at that time, and HR proposed to use virtual currency as one of the prizes for the employee lottery game. I found a link from a seller in the Babbitt forum, jumped to a Taobao store and bought 1,500 yuan of Dogecoin as a lottery prize (more than 20 million yuan at the ATH price).
Most people didn’t encrypt.wallet, I could only print the private key on a small piece of paper and put it in the lottery box for everyone to draw. It's still very funny when I think about it now.
In the bull market of 2021, Elon Musk started to call for Dogecoin, which caused the price of the currency to soar a thousand times. I was heartbroken because I didn’t hold on to the Dogecoin I bought early, and I couldn’t understand why so many people asked me how to buy Dogecoin. The logic at that time was still the so-called web3 In the new world,crypto It must be able to solve certain problems to have value and reason for existence. Friends who come to ask are advised not to buy this worthless meme coin.My prejudice against meme coins caused me to ignore the most important point: consensus is value, and existence is reasonable!
When the time came to April 2023, the frog meme coin $PEPE broke through 1 billion US dollars in a very short period of time, and soon became popular in major first-tier cities.exchangeThe listing has once again set off a huge meme coin FOMO wave.
When the fund held an internal meeting to review and discuss the intrinsic investment value and trading model of meme,We gradually realized that this is a new consensus mechanism, that is, FAIR PLAY! Fair play!This is also the ultimate goal pursued by mankind in all fields! This value consensus mechanism combinedBlockchainTechnology has created a whole new financial product, namely crypto Native meme coin.
为什么说 FAIR PLAY 是 meme 币价值共识机制的核心，要从cryptocurrencySince Satoshi Nakamoto created Bitcoin, the fixed number of 21 million Bitcoins cannot be increased.cryptocurrencyThe cornerstone of pricing,BlockchainTechnology realizes the non-increase property of Bitcoin, thus formingcryptocurrencyUnique mechanism that is not inflationary and creates scarcity.
The world's legal tender has been increasing in issuance and causing inflation. In contrast, cryptocurrencies, which cannot be increased in issuance and cannot cause inflation, naturally have a theoretical basis for the corresponding legal tender prices to continue to rise.
Although cryptocurrenciesBlockchainTechnology has solved the problem of a fixed total amount and the inability to increase the amount of tokens, but it is not a fair competition model and is even full of fraud and scams.contractAfter achieving the ability to quickly issue tokens at extremely low cost, the ICO model quickly became popular.contractLeadingTokenThe essence of issuance is to pre-mine the project assets at one time, which is Fully Diluted Valuation.
Pre-mine theseTokenThis means that all assets of the project are manufactured in advance, and the project party adoptsTokenThe economic model is used to allocate tokens to various stakeholders and formulate unlocking and releasing rules, such as the portion left for VC investment institutions, the portion left for ecological funds, the portion left for the team, etc.
与此相对应的 crypto 二级市场堆积了大量的低流通高市值的 crypto 项目，散户投资者在二级市场购买这种持续被稀释的通胀资产（虽然代币总量是固定的，但可流通的代币数量处于持续通胀），There are more and more coins in circulation on the market, and the tokens in the hands of secondary market investors are becoming less and less valuable. This is why a large number of retail investors complain about being ripped off by the constant taking over of shares.
Meme coin appeared at the right time. It had no complicated token economic model, no VC investment support, no practical product business process, and even the founder of the project was an anonymous person with no public identity information.But one thing about them that is most attractive to the younger generation of crypto investors or speculators is that the token distribution is transparent and fully circulated.
This may be something most people haven't realized yet.Meme coins have gone through several bull and bear cycles and have been recognized and sought after by the crypto market and investors. Its essence is that the consensus mechanism of human beings on the value of crypto assets has been upgraded to the 2.0 stage.That is, from the earliest 1.0 stage where encrypted assets (trading targets) cannot be arbitrarily issued, to the 2.0 stage where encrypted assets (trading targets) cannot be arbitrarily diluted, this is also the inevitable trend of the development of the cryptocurrency industry based on the FAIR PLAY consensus mechanism.
The value model of meme coins is a new type of virtual asset that most traditional investors or VC institutional investors in the crypto industry cannot understand, even hate, or even hate. The pricing model of this asset is not supported by any product, user, or business data, nor is there a calculable asset price evaluation formula. The only thing isCommunityConsensus and group trading sentiment.
Through continuous participation in meme project investment and transactions, I have gradually formed some understanding of this track.Xiaobai NavigationThere are three main aspects to analyze the future development trend of meme coins:
1. The market value of the meme sector is expected to increase rapidly in the next few years.At present, the overall market value of the meme coin sector led by $Doge, $Shib, $Floki and $Pepe is less than 70 billion US dollars. It is expected to grow to 400-500 billion US dollars in the next 2-3 years, and its share in the entire cryptocurrency market will increase to more than 10%. There will be more than 20 unicorn meme projects with a single currency market value of more than 100 billion US dollars and more than 10 billion US dollars.
2. There will be obvious generational stratification in the meme track.along withBlockchain公链技术的不断演进发展，meme 币也在跟随区块链技术发展而不断升级换代。
Dogecoin is a fork of Bitcoin code, representing the first generation of meme coins derived from Bitcoin mainnet technology. The second generation of meme coins starting from $Shib uses the smart contract of Ethereum.contractThe issuance of tokens entered the secondary circulation market. This year's very popular third-generation meme coins such as $BOME and $Slerf were produced on Solana, and benefited from users adopting on-chain DEX trading of meme coins, which has become mainstream.
The blockchain public chain technology used by these three generations of meme coins also has obvious generational differences. For example, Bitcoin is the earliest blockchain technology and does not support smart contracts but only simple point-to-point transfers. Therefore, the transactions of Dogecoin are mainly concentrated in major centralizedexchange CEX. The second and third generation meme coins use smart contracts to issue tokens, fully support on-chain transactions, and open the door to a new world of meme. The realization of AMM liquidity on DEX quickly attracts a large number of users to enter the secondary market for transactions.
3. The fair launch model will become the mainstream trend of meme coins.To obtainCommunityThe Fair Launch model must be adopted if the company wants to gain market recognition. The traditional IXO model will not be accepted.CommunitySupport from users and secondary markets.
The Presale model that became popular since $BOME is a typical example of fair launch. Tokens of 50% are airdropped to users who participate in the presale, and the remaining 50% are put into the DEX to add to the liquidity pool and the LP burns it publicly. This simple and even primitive fair launch model has been widely supported, and many subsequent meme projects have also been successfully launched in this way.
Recently, some meme coin project owners have directly rigged the funds raised during the pre-sale phase, or only used a small portion of the funds to add to the liquidity pool, making this simple fair launch model unsustainable. The key is that without an automated mechanism, people cannot be relied upon.
As a result, a meme launchpad project called pump.fun has recently appeared on the market, which is a one-stop automated coin issuance and liquidity adding project based on smart contracts. The meme project Dev can issue coins and add DEX liquidity in just one minute, and the threshold for traders to use it is also very low, which is more suitable for early speculative transactions of small-cap meme projects. It is expected that the one-stop launchpad for pump-type automatic coin issuance and liquidity adding will become the infrastructure of the meme coin track.
Regarding the investment logic of meme coins, I generally analyze it from three perspectives: meme cultural influence, community size and cohesion, and unique storytelling, but these do not represent any investment advice.
1. Meme itself is a product of Internet emoticon culture output.Of course, there are also non-emoji meme coin projects like $People and $Trump, but they are all Internet pop culture outputs with wide influence. Most memes have unique and distinctive animal images. For example, the Japanese Shiba Inu of Dogecoin has been liked by hundreds of millions of fans around the world. The image of $PEPE comes from the frog in the comic "Boys Club". Its emoji package is very popular and highly recognizable on the Internet.
When the cultural influence of a meme is projected onto the underlying asset, a huge consensus on value will be formed, causing the market value of the project’s token to quickly rise to unimaginable heights.
2. The size and cohesion of the meme community are also very critical.When the community reaches a certain size, community members will spontaneously generate cohesion, including creating secondary content or peripheral products for the meme, expanding its influence on various social media, and allowing more people to understand the meme image and unique cultural connotations.
Of course, the most effective way is to attract more people to buy and hold the project's meme tokens. By observing the density and quality of information exchange between community members, we can understand the overall community cohesion and token holdings.
3. The unique storytelling of meme will bring strong value consensus.For example, the founder of Dogecoin sold all his Dogecoins for a second-hand Honda car, Vitalik Buterin donated all the $Shib tokens worth one billion US dollars airdropped to him by the Shiba Inu project to the victims in India, Musk once declared that Dogecoin will be used as the common currency for Mars immigrants in the future, and recently the Slerf project accidentally destroyed the pre-sale airdrop tokens by sending them into a black hole, and will subsequently issue NFTs for sale to repay previous pre-sale investors.
These are unique and interesting crypto stories that are good for quickly spreading their cultural influence on social networks, thereby forming a consensus on the value of meme tokens and driving price increases.
Finally, I figured out one thing: BTC is the most awesome meme, and the meme coin that best represents crypto Native culture!!!
The article comes from the Internet:Meme coin's value consensus mechanism, future trends and investment logic
DCA is a superior strategy because you never risk too much, you get the best average Bitcoin price, and you will still outperform most traders in the long run. Written by: A Fox Translated by: Xiaobai Navigation Coderworld This article summary Passive observers are those who want to invest in cryptocurrencies but don’t want to…
相关文章
