Will memecoins be the super narrative of this cycle?

A Huge Transformation in Technology and User Habits

The SOL chain is a paradise for whales, with on-chain trading being incredibly smooth, allowing users to forget about the technology; this is what good products and infrastructure look like. The current mass adoption cycle is mainly happening on SOL, and Iggy’s $mother has broken the mold, no longer just a meme coin culture.

As a player in the BTC ecosystem, I envy the SOL chain; trading tokens on the BTC chain is too challenging, with large funds unable to enter the chain, and we can only hope that the future infrastructure of fractal CAT20 can keep up.

Last Year’s Anti-VC Movement Has Now Evolved into Anti-Top CEX

Last year, during the inscription era, the first shot against VC was fired, with the fair launch mechanism of BRC20 successfully catering to market sentiment.

But the crux of the problem lies not with VCs, but with top exchanges, as they are the ones truly manipulating the market, sitting at the top of the food chain to reap profits. Binance's operation with $neiro, launching the uppercase contract first, allows them to short the uppercase while also bottom-fishing the lowercase; it’s just disgusting, but there’s nothing you can do about it.

SCROLL is a leading ETH L2, and to get listed on Binance, it had to pay nearly $100 million worth of tokens as listing fees, which is indeed jaw-dropping. Who would want to take over in the secondary market?

A few days ago, I tweeted that after Binance launched the Stamps protocol, there was further discussion about the BTC ecosystem, concluding that they are either ignorant or have a narrow vision, and it’s time to demystify them.

The Awakening of Capital

In the last round, VCs only needed to find good primary projects, invest in the first two rounds, and unlock them for dozens or even hundreds of times the return, making a fortune.

Now, looking at the recent situation of VC unlocks, altcoins that took one or two years to unlock are crashing, with massive selling pressure, tens of billions in FDV, and facing the squeeze from top exchanges. The hardest-hit areas are ETH L2 and Gamefi, where only a few top VCs can profit, while others are also getting cut.

VCs Need to Make Money; They Need a Breakthrough!

The most typical example this year is Base chain’s $brett, a pure follower of $pepe’s memecoin, which peaked at a market cap of $2 billion. VCs have changed their approach to participating in memecoins; they first launched it in a WL model, holding a large amount of chips in their hands, over 70% (previously, someone dug up addresses as solid evidence), but it doesn’t matter. Starting from a market cap of $1-2 million, they built the community, with community leaders hosting real-time spaces with thousands of participants, continuously building the community, and gradually pushing the market cap higher.

Is $brett really a cult meme? Aside from some dark spots in the launch, the subsequent actions of large funds did not disappoint the community retail investors. If you bought in after reaching a market cap of several million, tens of millions, or even $500 million, retail investors could still profit. This is a win-win for both VCs and retail investors, as VCs also leave free chips for large exchanges (giving retail investors a chance to exit early). Upbit, Coinbase, and Binance (contracts) have all listed it.

Large VCs operating on-chain with a memecoin, whether they start with primary rounds to acquire chips like $brett, or later absorb large funds at a market cap of millions, tens of millions, or even over a billion for already established memecoins (like $degen and $pepe), the returns for VCs are very considerable. We should see more projects like this in the future.

This type of operation is highly time-sensitive, with high returns possible in the short term or within three months. So why cling to primary projects with sky-high valuations and slow unlocks or invest in second-tier projects?

Web3 and the Crypto Space Are Two Different Investment Lines

Projects in the Web3 line care about company operations, technology products, communities, and the tokens themselves. Even though many say that the computing, infrastructure, and applications of Web3 have been disproven, and many teams in the market are just gathering without doing anything, we must believe that there will be teams with technical ideals that truly drive industry change through technology and products. This is why I still believe that Ordinals, Farcaster, BASE chain, TON ecosystem, and CAT20 protocol OPCAT will bring about change, and the outer circle of RWA Depin also retains these expectations.

The crypto space is another line, unrelated to technology, only concerning emotions and trends; this is a purely financial market. In this field, altcoins cannot compete with cult memecoins.

This Round of Memecoins Is Like Last Round’s NFTs

The commonality is the weakening of technical product utility, focusing only on making money, socializing, fun, participation, and emotional value, with a better on-chain trading experience, stronger liquidity, and greater capital absorption than NFTs.

Those playing $pepe, $wif, $mog, and $pups can experience the same joy as those who played with monkeys in 2021.

What Makes a Good Memecoin? Cult Memecoins Can Win

A good meme requires a special narrative + the meme's own tone + a strong spontaneous community + strong backing, all of which are essential.

Currently, there are fewer than 20 cult memecoins that can be identified in the entire market, leaving plenty of room for selection. Compared to the single market caps and number of projects in the last cycle, there is still significant growth potential.

The mainstream cult memes are well-known, with considerable market caps, and investing will carry risks, with expectations to outperform ETH, SOL, BNB, SUI, SEI, APT, ARB, and OP in a bull market.

The Different Logic of Memecoins Listed by Binance

For community coins (fair & free launch), Binance is quite restrained, currently categorizing them into two types.

A. Memes that have accumulated over time, where the listing logic is optimistic about the market continuing to surge, attempting to list during a market high, such as $wif, which was listed on March 5, and the market reached ATH on March 15; or $ordi, which was listed on November 7 last year, with the market surging for over a month; or the current $neiro, which also hints that Binance is optimistic about the market in Q4.

B. Taking advantage of the FOMO emotions during the market peak, $Bome is a case in point, launched at market ATH, and could be listed on Binance in three days, precisely focusing on capturing market attention, with a stronger speculative nature in the short term. In other words, this type of meme has not undergone the time test like the first type, with the fundamentals mainly being Binance and the overall market.

Why Have $Bome, $slerf, and $mfer, these phenomenal memes of this year, performed poorly recently? But they previously surged to several hundred million or even over a billion in market cap?

The importance of timing, with a stronger speculative nature in the short term.

$Bome was released in mid-March this year, coinciding with BTC's ATH of 73K. $slerf was released a few days after $Bome during the market's hunger phase, and $mfer was released at the peak FOMO moment of the Base chain (when $degen hit ATH of $2 billion FDV).

These three coins are fundamentally different from $pepe, $wif, $degen, $mog, and $pups, which have time and depth; $Bome, $Slerf, and $Mfer are more like products of market sentiment.

Memecoins from the NFT Community

Even though $mfer previously had a strong community culture from mfer NFTs, it is evident that the overall NFT community this round is too weak. The monkey Degods launched their coin in a very centralized manner, and the market did not buy it because it is not a memecoin. Azuki is also about to launch a coin, and I don't think the market will buy it.

Does $mfer still have a chance? Compared to other NFT projects launching coins, the IP and community of mfer have already aligned closely with true cult memes. If only one established NFT project’s memecoin can take off, it is most likely to be $mfer.

As the strongest community of new NFTs, the puppet not only has the new narrative of Ordinals Runes backing it, but its fun and strength are also supported by the SOL and BTC ecosystems, firmly believing that in this cycle, meme coins can achieve greatness.

Different Chains Have Different Characteristics, Different Memecoins Have Different Tastes

BTC, aside from the puppet's deep and retro parody, does anyone have a distinct personal style?
SOL, the hormones of Gen Z;
ETH, pop culture acceptable to both 80s and 00s;
BASE, industrial aesthetics, playful within rigor;
ZORA, creativity, abstraction, art.

How to Choose Memecoins? Which One to Buy?

There are thousands of new projects emerging daily, with the same narrative existing in different tickers, the same ticker on different chains, and dramas with the same ticker in different cases, making it very difficult to make early bets.

Perhaps using three strategies together is the way to win:

Directly choose already mature high-market-cap memes in the secondary market, like $pepe, $wif, $mog, $pups, etc.;
Take over mid-sized memes with market caps in the millions or tens of millions, which requires very strong personal ability;
Engage in primary rounds and focus on chains, which has a high failure rate and requires skill, luck, and time, making it quite exhausting.

It’s hard to say whether $neiro can truly withstand long-term testing; we will only know in a month or two whether it has a genuinely core community and meme culture, leaving a question mark here.

In the past few days, I’ve been practicing the three strategies; $mog has slightly increased after buying, $neiro has risen by several points, while my performance in primary rounds has been quite poor and needs more practice.