Wealth creation, narrative, and capital preference completely crush mainstream coins; will MEME become the new mainstream?

Author: Frank, PANews

Since the beginning of this bull market cycle, MEME coins, inscriptions, and airdrops have been continuously grabbing attention, while the once-mainstream tokens have not seen the expected surge. The airdrops of several star projects have also disappointed the community due to lower-than-expected outcomes or falling token prices.

In contrast, MEME coins have gradually become an important barometer for the entire crypto industry from a niche segment. Why are once-mainstream coins no longer favored? Why are more and more mainstream institutions turning to MEME coin holdings? What potential changes have occurred during the rise of MEME over the past year? Can this prosperity be sustained? With these questions in mind, PANews has conducted research and reflection on the development of MEME.

Compared to mainstream coins, MEME has a stronger wealth creation effect

In the past year, the performance of mainstream coins has generally been unsatisfactory, and several highly anticipated airdrop projects have also failed. Against this backdrop, the wealth creation myth of MEME coins has frequently emerged. Is it really unprofitable to invest in mainstream value coins?

According to a report by Keyrock, most airdrop project prices in 2024 collapsed within 15 days, with 88% of tokens experiencing significant declines within three months.

To conduct a comprehensive comparison, PANews has compiled the performance of several categories of previously popular tokens, including mainstream public chains, blockchain games, metaverse, inscriptions, airdrops, and established MEME coins, from January 1, 2024, to October 15, 2024. From the data, it can be seen that only established MEME coins and mainstream public chains have shown an upward trend this year, while the average decline of this year's popular airdrops and the previously hot inscriptions is around 50%. The blockchain gaming and metaverse sectors have also seen declines of 23% and 52%, respectively.

It can be said that, apart from a few popular public chains (such as SUI, TON, BNB), the performance of other mainstream tokens has not matched that of Bitcoin. This comparison does not include emerging MEME coins, as these newly popular MEMEs inherently "win by rising," and due to their low early market capitalization, they can easily create hundredfold or even thousandfold increases. It can be said that the main reason MEME has replaced mainstream coins is that its market performance is more enticing.

Narrative logic and changes in thresholds

For a long time, the narrative of mainstream projects seems to be their most important foundation. From the earliest Ethereum smart contracts to EOS's third-generation public chain, to later Layer 2, cross-chain, metaverse, blockchain games, and now re-staking, Bitcoin ecology (inscriptions and runes parallel chains), social media, artificial intelligence, etc. A significant change is that the technology appears to be increasingly advanced, with new terms and new gameplay emerging constantly. These changes stem from the overcrowding of mature sectors, necessitating the creation of new sectors to better achieve financing. On the other hand, airdrops have turned into point systems, and the increasing complexity of tasks like writing inscriptions and coding has dazzled retail investors, making it difficult for more new users to join.

However, the narrative of MEME is completely different; it is a very simple narrative, a picture, a term, a symbol, gathering consensus based on a cultural gene that everyone understands. People do not need to understand the logic behind the technology, nor do they need to go to great lengths to investigate whether the project party has truly achieved those technological innovations.

On the other hand, with the rise of Solana, the previously rampant honeypots, Pi Xiu, and code vulnerabilities on Ethereum have significantly decreased, undoubtedly lowering the entry barrier for ordinary users into MEME. This year, there have been more tools in the MEME sector, further enhancing the MEME experience. Tools like Dexscreener and Birdeye have successively supported more token charts across different chains.

The popularity of one-click token issuance platforms like Pump.fun has made the biggest contribution to MEME. As these tools become mainstream, MEME coins seem to have completely solved the issues arising from code vulnerabilities, allowing the cultural attributes, capital, community, and other exclusive characteristics of MEME to play a more direct role.

These various changes reflect two trends in the crypto community, like the two ends of a balance scale: on one end, new projects are becoming increasingly complex with higher participation thresholds, while on the other end, MEME coins are lowering the threshold through minimalism and specialized division of labor.

In a market with limited funds and users, the balance is now tilting towards MEME.

Public choice, capital follows

As retail investors enthusiastically embrace MEME coins, institutional capital seems to be starting to allocate resources in this direction. According to monitoring by Lookonchain, Wintermute has been accumulating NEIRO (Neiro on Ethereum) since September 6, amassing a total of 62.45 million NEIRO (7.39 million USD), accounting for 6.25% of the total supply. NEIRO is one of the largest MEME coins held by Wintermute. On October 11, news from The Data Nerd reported that, in addition to Wintermute, three other market makers (MM) and one venture capital firm hold $NEIRO_ETH tokens.

According to data provided by @thedefiedge, as of October 15, Wintermute's holdings included approximately $10.52 million worth of PEPECOIN, making it its third-largest token holding, along with $3.48 million worth of NEIRO. It has become the most publicly known market maker with the largest holdings. Additionally, Jump Trading holds $1.2 million worth of SHIB.

Recently, Gotbit, which has been sued by U.S. federal prosecutors, has also been pointed out as a market maker for Neiro. Furthermore, several MEME projects, including Beercoin, WaterCoin, and Hamster Kombat, have urgently clarified or distanced themselves from Gotbit following the incident. From this news, it is not difficult to see that the participation of professional market makers in the MEME coin market has become quite common.

Moreover, according to multiple analyses of popular MEME coins by PANews, to evade on-chain hunters, market makers tend to manipulate the MEME market by using decentralized wallets, making bulk purchases, transferring assets, and hiding their sell-offs. These operations have made the actual proportion of institutional holdings within MEME a mystery.

From the perspective of capital, it is not difficult to discern the motivations behind this. In mainstream value project investments, VCs not only need to make a large one-time investment but also have to wait a long time for project development and operation. After designing airdrops, point systems, and other methods to attract users, they often have to lock up their investments for a long time before they can realize returns. In contrast, investing in MEME coins is relatively straightforward; one can choose market-tested targets, directly hold tokens without lock-up periods, and achieve high returns due to higher capital levels, all of which align with the interests of capital in the current MEME coin market.

From Ansem to Murad, each generation has its own legends

Recently, Murad has become a new legend in MEME due to his speech on the "Memecoin Super Cycle" and his holdings of over $24 million in MEME coins. Meanwhile, the previous MEME legend Ansem seems to be facing scrutiny. Through the achievements of these advanced MEME players, we may be able to observe some significant changes in the styles of MEME players.

Ansem initially rose to fame through WIF tokens, and his overall style leaned more towards being a "diamond hand," meaning he would buy in with a small amount of capital after early positioning and sell when prices peaked. This style was quite popular among earlier MEME players, who concentrated their efforts on finding potential MEME coins and aimed to buy in at the earliest stages. However, this method undoubtedly carries a high risk of error; once faced with a Pi Xiu market or malicious manipulation by issuers, it can lead to significant losses. Ansem was clearly a standout in this early style, always able to identify potential tokens early and realize profits.

Murad's rise represents another operational style becoming mainstream. According to Murad, his criteria for MEME coins are as follows: mid-market cap coins between $5 million and $200 million; located on Solana and Ethereum; and at least six months of history. From these criteria, Murad prefers to look for relatively mature tokens rather than hoping to buy in at the earliest stages. Additionally, compared to Ansem's frequent buying and selling, Murad's trading frequency is much lower, with many tokens held for several months, resembling the investment methods previously used by institutions in mainstream value coins.

MEME Season: Decline or New Opportunity?

From an industry-wide perspective, mainstream value projects remain the backbone of this industry and are more recognized by capital and institutions as investment targets. Therefore, many believe that the rise of MEME coins will further undermine the values of the crypto world. If one can gain substantial wealth merely by manipulating prices and maintaining communities, how many people will still be willing to put in the effort to innovate technologically and drive changes in the entire industry or even the Web2 world?

This is indeed a concern worth noting. Looking back at the MEME coins that have gained fame, there are hardly any reports of these tokens' project parties or communities introducing innovative technological solutions or governance models to the entire crypto market. Instead, with the popularity of MEME, on-chain hackers, sandwich attackers, and MEME packaging teams have reaped substantial profits. Whether the profit levels for retail investors have genuinely improved remains to be debated.

However, if we separate cryptocurrency from blockchain technology, technology is technology, and MEME coins represent the developmental trend of cryptocurrency as an asset class. Behind mainstream value coins, those projects that truly possess technological innovations will still be recognized by capital and the market, while the MEME coins that have been eliminated are merely some false project coins disguised in technical clothing. As Murad stated, ordinary investors are gradually realizing that the token itself is the product, not the software. He believes that the current crypto industry is still primarily an asset production industry, with technology being a subsidiary.

Therefore, the trend of MEME becoming mainstream seems to have become a fact. For speculative players, profit-seeking is a natural goal. The decline of mainstream value coins poses a challenge to the previous VC value system; it is time for reflection and change to reclaim their stage.