Author: Stacy Muur Source: Stacy in Dataland Translation: Shan Oppa, Bitchain Vision

Memecoins has overwhelmed all other Web3 narratives over the past few weeks, making average users feel that meme train is the only way to get good returns.

After $PNUT, $PEPE, $BONK, $BRETT and some other currencies were launched one after another, as memecoin reached its highest daily trading volume and the popularity of the “meme” category also increased, so they were not worth paying attention to it.It’s strange.

But are risks and benefits equal?How severe is the memecoin market hype?

The current situation of Memecoin

Is Meme really a hot topic this year?

If you find someone who has been involved in the Web3 market for at least five years and ask them to define 2024 as a “year,” they might say it isThe year of memecoin.

Many people praised memecoin as the best performing currency this year, and the charts and rankings also supported this view.But does this really reflect reality?

If you analyze industry performance so far this year, the data may tell different stories.For example,On Artemis, the RWA index (Ondo, Mantra, Clearpool and Maple) lead with a 1,900% growth rate, while memecoins has a 258% growth rate and Bitcoin has a 104% growth rate.

In addition, it is also important to know which memecoin is being considered.On Artemis, the memecoin index currently tracks only 19 largest memecoins.

CoinGeckoThe category rankings on the table face another problem: many Memes fall into multiple categories, so a few strong winners can significantly improve the performance of multiple categories in 7 days at the same time.

Taking the Pump.fun ecosystem that tracks 520 tokens as an example, I can understand why I think this is a problem.As the second largest token for the week, it looks very optimistic, triggering strong FOMO sentiment.

However, when you look at the rankings, you will find that there are less than 20 tokens with a 7-day increase of more than 110% (the average of the category), which translates to a percentage of just 3.8%.In addition, less than 60 tokens (11.5%) had positive weekly gains.

This is no longer WAGMI, right?

From the perspective of performance tracking, Meme CoinThe main problem is thatIndustry performance is often measured by the largest or most popular assets in the category.This creates the illusion that Meme coins are superior to all other Web3 industries.However, to put it more accurately,LeadofMemeCoins perform better than other categories.

This leads to an important point of view from us:Existingmemecoin andNewmemecoin, because they represent two completely different markets.

New memecoin

CoinGecko currently tracks 520 memecoins on its Pump.fun dashboard.Since the launch of Pump,3 million tokens have been created.

This means99.982%All tokensCannotTracked on CoinGecko so we can’t understand how they perform.

At the same time, Pump attracts 50,000 to 70,000 new users every day, and the total number of active users has exceeded 150,000.

Here is a supplementary background information from the research I conducted at the end of August:

• Most top PNL addresses are token deployers

• Pumpdotfun Only 3% of all traders earn more than $1,000

• 0.8% of revenue exceeds $10,000

• More than 60% of people lose money

These are the new memecoin.Not a good choice, right?

For the average new memecoin trader, the main problem is the inability to distinguish between “new” and “mature” memecoin.Most new traders chase early protocols, hoping to replicate successfully achieved large-scale adoption0.001% success story—Similar to $PEPE or $BONK.

I don’t want to let you down, but the probability of death after being hit by lightning is higher: 0.011%.

Create memecoin

For mature memecoin, the prospects are much brighter.They do not gain a certain market value due to VC support or specific valuation factors.Instead, they succeed because they have community, a little luck and strategic market management.

This may sound like a conspiracy theory, but I believe most memecoin with solid market share are not launched by random developers.Behind these successes are often a professional memecoin developer team, who have a large number of market making and marketing resources.

To be clear, I’m not saying that all popular memecoins are the result of a perfectly executed plan, but this may apply to most memecoins.

Compared to many other Web3 fields, several logical factors lead to the excellent performance of mature memecoin:

• 100% supply in circulation (no low flow or high FDV)

• No venture capital support (eliminates additional sales pressure)

• Organic active community of holders

• No product risk (no vulnerabilities, ineffective execution or poor user acquisition)

• Memecoin rotation mode (rewards flow from one memecoin pump to another memecoin pump)

• It has a strong correlation with general market cycles

• Low dependence on marketing

Memecoin trading is purely speculative and has become more predictable this year, forming a behavioral pattern that shifts the volume and liquidity of “classic” tokens, especially given that Web3 currently has no dominant or fresh narrative.

By the way, Meme token liquidity hit an all-time high of $110 million last week, measured by the 1% market depth on the US exchange.Large Meme tokens such as SHIB and DOGE continue to dominate, accounting for more than 70% of the total market depth.

However, their share has been gradually declining, indicating a growing interest in small tokens.

In which stage is the market?

Currently, over 50% of the transaction volume on Solana comes from memecoin.On BNB, this is close to 45%, while on Base, this is about 25%.

That’s too many.

However, history shows that it is usually too late when the market is busy promoting a narrative of some kind after price changes.

In my opinion, the memecoin marketalreadyRespond to Bitcoin’s rebound.

As long as the price stays around $90,000, I doubt if I will see a new surge in mature memecoin – what we call cult coins to avoid confusion with the 3 million tokens created on Pump.fun this year.

However, retail, which has always lagged behind on popular topics, is still boarding the train, looking forward to heading to Valhalla.

The main problem is not just that most recent students are late; it is a common situation in all stories.

The real problem is that a large percentage of retailers are taking the new memecoin train, which usually heads to Hel rather than Valhalla.

As a result, new users were turned away and could not join further.For the Web2 normal, the difference between Meme and Classic coins is small; they are both just stock codes.So, this bad experience extends to all verticals of Web3.

To clarify, I am not against cult coins – memecoin with a fixed market share.They have many advantages.But, I think weReally need to stopUse the same word on Pump.fun to describe great things and badly designed lottery tickets.Let’s solve this problem.

Here are my last thoughts

• If you are an experienced meme currency trader, please continue with your strategy, but be aware that the market may be overheating.

• If you are new to meme coins and have a strong sense of FOMO, consider allocating a small portion of manageable portfolios to experiment with a focus on mature hot coins.

• Don’t play new games unless you know how to win.There is a very important rule:If you don’t know how to win, don’t play.