Memecoin Golden Age: Repeat the NFT Path, or Start a New Script?

Author: Wenser, Odaily Planet Daily

First, there was Trump selling NFTs, and then there was the Kardashian family patriarch Jenner launching Pump.fun to sell meme coins… The last time celebrities rushed into the crypto industry was during the NFT craze from 2021 to 2022; now, just like the previous "everything can be an NFT," the meme coin craze is expected to take over from NFTs, becoming a new battlefield for countless celebrities, influencers, KOLs, and anonymous teams to cash in.

This article provides a brief comparative analysis of meme coins and NFTs for readers' reference.

Commonality Analysis: Are Memecoins and NFTs Twin Brothers?

In the article "A 3-Minute Overview of the Brief History of Memecoins: Past and Future," we mentioned that meme coins originated from POW coins after Bitcoin, with DOGE, born in 2013, generally regarded as the "first meme coin," predating the emergence of NFTs. Therefore, based on their similarities, in terms of time, meme coins are the "older brother," while NFTs are the "younger brother." When broken down, the two mainly share commonalities in the following aspects:

Similar Starting Point: Coming from the Community, Going Back to the Community

When it comes to the primary commonality between meme coins and NFTs, the community attribute undoubtedly ranks first.

Whether it’s established meme coins like DOGE and SHIB, emerging stars like PEPE and WIF, or NFT OG projects like Cryptopunks and BAYC, as well as leading NFT projects like Pudgy Penguin, Azuki, and Weirdo Ghost Gang that are continuously exploring IP operations, a strong and united community is essential at the starting point and throughout the subsequent development of a project.

This is also one reason why many NFT players can quickly integrate into meme coins after starting to play them, as a good project, whether in community atmosphere or cultural aesthetics, tends to be relatively consistent. Whether it’s shared interests or mutual appreciation, ultimately, it’s about being able to play together to form a community.

Similar Symbols: From Zoo Animals to Celebrities

The symbols of meme coins and NFTs are also a significant commonality. Whether it’s zoo symbols like dogs, cats, mice, monkeys, frogs, pandas, and penguins, or celebrities like Trump, Kanye West, Coinbase CEO Brian Armstrong, Steve Aoki, and Snoop Dogg, these are commonly used images and visual symbols in meme coin and NFT projects. Notably, the meme content combining Trump and the Pepe image was even used as campaign material.

It’s no wonder that there were reports stating that Biden's campaign team planned to hire a meme manager to attract young voters, after all, memes are the "cultural common denominator" that can resonate, and both meme coins and NFTs can serve as carriers of memes.

Trump & Pepe Meme Content

Similar Entry Barriers: Memes and "Small Images"

In terms of entry barriers, meme coins and NFTs also share certain similarities, such as:

1) The understanding cost of both is relatively low; one is a token related to memes, while the other is a "small image"; 2) The purchasing threshold for both is relatively low; one is a token priced with several zeros after the decimal point, while the other is a non-fungible token that can be free minted with only gas fees; 3) The selling operations for both are relatively simple; one is directly traded on-chain through DEX or sold on exchanges, while the other is traded through various NFT marketplaces.

Of course, the relatively low entry barriers for both are only in comparison to other cryptocurrency fields like DeFi, GameFi, and SocialFi. After all, a single wallet might block countless Web2 users, leaving them only to look longingly at the "airdrop" in the cryptocurrency industry.

Differences Breakdown: Are Memecoins More Addictive than NFTs?

Compared to their commonalities, the differences between meme coins and NFTs deserve more discussion. For many, the reason they keep losing in the NFT space and see little change after playing meme coins is due to a lack of clear understanding of the differences between the two, making it easy to fall into the more perilous "PVP trap," leading to continuous losses and ultimately having to exit. Specifically, the differences between meme coins and NFTs include:

Liquidity Differences

There’s a saying in the industry: "If you don’t talk about liquidity, and only discuss floor prices or unit prices, you’re just fooling around." This is indeed true; the cryptocurrency industry is logically supported by countless liquidity sources. Therefore, looking solely at the price of a single meme coin or the floor price of an NFT makes it difficult to find quality investment targets in a volatile market.

Moreover, compared to the industry convention of limiting NFT projects to 5K or 10K in quantity, meme coin projects often have total supplies in the tens of billions, hundreds of billions, or even trillions. Coupled with the fact that the main user base in the industry is still token players, and that trading operations in the NFT market are relatively more complex than those on DEX, the liquidity differences between the two are significant, mainly reflected in:

1) Initial liquidity. Generally speaking, the initial liquidity of NFTs is much lower than that of meme coins; some NFT projects can raise the floor price with just a few dozen ETH, while meme coins require higher initial liquidity; 2) Liquidity speed. Generally, the liquidity speed of meme coins is far greater than that of NFTs; if they become the focus in a short time, both liquidity and market cap can grow rapidly, while NFTs are limited by the functional operations of NFT trading markets, making it difficult to achieve such rapid price increases; 3) Liquidity cliffs. Generally, meme coins have steeper liquidity cliffs; in extreme cases, the number of sellers and the amount of tokens sold can decrease rapidly within just a few minutes or even seconds, which is more terrifying than the "disappearing buy orders" phenomenon seen in NFTs.

Thus, NFT players transitioning to the meme coin space should first prioritize enhancing their awareness of project liquidity.

News Reaction Differences

Meme coins and NFT projects react very differently to news, and these differences are mainly due to the different mediums (Token vs. NFT) involved.

For NFT projects, positive news often falls into several categories, such as:

1) The project founding team is well-known in the industry; 2) The project receives significant capital investment; 3) The project creates a huge buzz or eye-catching effect in the Web2 space, etc.

Behind these pieces of information lies the NFT players' expectation for "buyers," meaning that NFT players will only choose to FOMO if they see stronger players entering the market and able to take over, hoping to sell the "small images" to "value investors." Therefore, many NFT projects find it hard to stop the decline in floor prices even if they pivot to issuing tokens without strong capital involvement.

In contrast, meme coins are entirely different. For meme coin projects with stronger community and meme attributes, the entry of capital or institutions often leads holders to sell off, perhaps because meme coins embody more people's expectations for decentralized spirit, or perhaps many feel that institutional entry signals a price peak.

Additionally, unlike NFT projects that "prefer to see the good rather than the bad," many times, what is commonly perceived as "bad news" for a meme coin project can actually be good news— for example, the Solana ecosystem meme coin project SLERF, after the founder accidentally destroyed the liquidity pool, attracted massive attention from the crypto community, turning "Oh, Fuck" into a famous meme for a time, leading the coin price to break through $1 and quickly list on several mainstream exchanges.

In other words, meme coin projects care more about "whether more people are paying attention" rather than "whether this matter is good or bad."

Spread Differences

Based on the above differences, and the more viral cultural carrier of meme coins compared to NFTs, the differences in spread are also significant.

A good meme coin can achieve hundreds of thousands or even millions of people spreading it in just a few days or even hours, while no matter how hard an NFT project tries, its target audience is limited to a relatively small circle, with thousands or even tens of thousands being the impact level that only top projects can achieve.

After all, the images of NFTs are limited, while the spread of memes is infinite.

Black Box Differences

Furthermore, due to differences in audience scope and distribution forms, meme coins have a stronger black box attribute than NFTs. After all, NFT insider trading often can only be distributed through whitelists, and the number of addresses is relatively small, while meme coins have more participating addresses, making insider trading addresses more concealed and the methods of offloading more diverse.

The flexibility of tokens is far greater than that of NFTs, which is evident.

Investment Strategy Choices

Therefore, based on the above differences, the game difficulty for meme coin players is actually higher than that for NFT players, so the investment strategies mainly boil down to three types:

• The first type is luck-based, purely relying on luck; if you buy the right meme coin and manage not to sell it off, then you deserve to profit;
• The second type is net-casting, casting a wide net and testing patience, especially during the meme coin craze, where investing a small amount in individual projects can ultimately lead to a victory in the horse-racing mechanism, meaning that one or a few successful projects can cover all costs and still yield profit;
• The third type is tracking, suitable for "living on-chain" + "sensitive to news" alpha players, who can complete a sniper action in the early stages of meme coin launches (generally within 1-3 hours), then sell in batches based on project development and news conditions, meaning acquiring a large number of chips early on and then taking profits in batches, laughing until the end, which is the most difficult, yields the highest returns, but of course, also carries the highest risks.

Darkfarms 1 Account Homepage Background Image

Analysis of Main Roles: Times Have Changed, but the People Remain the Same

Having discussed the changes, let’s now talk about what hasn’t changed, which is the main players currently in the field. We can categorize them into three types; times have changed, but the roles remain the same:

Project Teams

In the past, NFT project teams mainly consisted of two types of people: one group came from crypto native teams, whether DeFi teams or industry professionals, who generally had more experience in the cryptocurrency industry and a higher project success rate; the other group entered the Web3 space from traditional industries under the influence of wealth effects, achieving a "Web2 upgrade," including star projects, traditional company projects, IP projects, etc.

In comparison, the current meme coin project teams also include these two types of people, but the former's ratio is slightly higher, simply because crypto native individuals have stronger survival capabilities, able to endure bear markets, persist until bull markets, and remain active in today's "monkey market." Meanwhile, traditional teams have either been eliminated or quickly integrated, gradually understanding industry rules and familiarizing themselves with industry unspoken rules, embarking on their own "opening and harvesting journey."

It’s worth mentioning that a significant portion of the project teams in this year's meme coin craze consists of former crypto artists. BOME, through efforts in Darkfarms1, became a leading project in the meme coin craze, achieving the milestone of "listing on Binance in 3 days," and he himself is a loyal fan and creator of Pepe memes, also being an NFT artist.

Participants

Unlike the relatively homogeneous composition of participants in the previous NFT space, who might have entered NFTs "for art," "for aesthetics," or "for collectibles," the current participants in the meme coin industry have a more complex composition, including wealthy whales, rich individuals, and wild speculators, as well as small dreamers entering the space, and even aspiring youths "looking to improve their lives." However, everyone’s purpose is surprisingly consistent and pure: to make money.

Whether it’s zero-sum games within the market or capital inflows from outside, a meme coin project that makes me money is a good project.

Different Types of Platforms

In contrast to the previous NFT trading market dominated by a few strong players, and the situation where "Blur emerged, and NFTs perished," the emergence of meme coins has instead facilitated the continuous development and improvement of different types of platforms. There are aggregation platforms like DEX SCREENER, DEX TOOLS, and BirdEye, as well as robotic tools like BananaGun, PepeBoost, Gmgn.ai, and NFT Sniper, which have made countless profits during the meme coin craze through advertising, subscriptions, or transaction fees.

One can only say that opportunities are reserved for those who are prepared, and so is money.

Dex Screener Account Homepage Background Image

The Unchanging Theme: Asset Issuance and Wealth Games

Time flies, the bull and bear continue, many things have changed, but only two things remain unchanged:

Asset Issuance: From NFT Component Platforms to "One-Click Token Issuance"

In the past, NFTs served as a major avenue for asset issuance, but there were many issues, such as art preparation, contract deployment (different standards like ERC 721, ERC 1155), project operation preparation, pricing strategies, KOL marketing, whitelist mechanisms, gas fees during minting, etc. This led to the emergence of various types of platforms like NFT component platforms, NFT mint platforms (like mint.fun, Zora, Manifold, etc.), and floor sweeping platforms (like Genie). It’s no wonder that at that time, some joked, "Many NFT project teams could directly rob money, yet they still give me a small image."

Now, meme coins have become the hottest track; whether it’s celebrities, artists, stars, or L2 networks and popular ecosystems, they can all achieve asset issuance and market attention through meme coins. Platforms like Pump.fun that offer "one-click token issuance" have pushed the meme coin craze to its peak, and the rapid increase in the number of meme coins in the Solana ecosystem is also attributed to this.

This reflects a significant long-term trend in the cryptocurrency industry: any model that can achieve rapid asset issuance will become a part of the industry.

From the past DeFi Summer to the GameFi craze, and then to the NFT Summer, this has always been the case.

Wealth Games: From Believing in Capital to Not Taking Over from Each Other

Compared to the past, the landscape of wealth games has also undergone a tremendous change. The development of the cryptocurrency industry used to rely heavily on the push from venture capital institutions and cryptocurrency funds; on one hand, it was due to the need for financial support, as the entry of capital could bring more stable cash flow support; on the other hand, it was due to the influence brought by capital beyond just funding, such as marketing, legal compliance, endorsements, etc.

However, after the approval of the Bitcoin spot ETF in the U.S. earlier this year, the situation has changed.

The previous scenario where retail investors took over from institutions has been rejected by the market. Whether it’s L1 public chains, infrastructure construction, L2 networks, or AI, DePIN, RWA tracks, compared to the "at least on the surface" more decentralized meme coin track, their attractiveness has significantly diminished.

On one hand, if it’s for investment position allocation considerations, retail investors can enter the cryptocurrency market through U.S. stocks and buy Bitcoin spot; on the other hand, if it’s for high multiples and high-risk wealth accumulation, retail investors are more inclined to invest in meme coins with lower entry barriers, easier understanding, and no so-called "value empowerment and roadmap promises."

One cannot help but say that this generation of retail investors seems to be harder to fool than before.

Or perhaps, the market environment has indeed changed.

Conclusion: Memecoins May Become the "First Lesson for Newcomers in Crypto"

In conclusion, I would like to end with a question.

Many people judge the market sentiment stage based on the FOMO level of the outside crowd. Some use whether outsiders (especially market vendors) inquire about the timing to buy Bitcoin as a standard, while others use whether outsiders buy meme coins as an indicator for exiting at the peak, which can indeed be quite accurate at times.

But looking at it from another angle, when an ordinary person with limited assets first enters the cryptocurrency market, looking at the dazzling array of tokens on exchanges or DEXs, the colorful candlestick charts, and the different buy and sell operation buttons, with a few hundred or a few thousand dollars in hand, will they choose to "steady and steady, invest in Bitcoin and Ethereum," or will they choose "highly contagious, emotionally resonant, with token prices low enough to be negligible and potentially offering 10x, 100x, or even 1000x high returns meme coins"?

To be honest, I don’t have a standard answer, and the answer lies in everyone’s heart.